The IRS has issued a determination, Tech. Adv. Mem. 127670-12 (May 9, 2013), concerning a community development district in Florida that may ultimately have the effect of limiting the issuance of tax-exempt bonds by similar districts in Missouri, such as community improvement districts (CIDs) or transportation development districts (TDDs). The IRS found that the Village Center Community Development District could not issue tax-exempt bonds because the board of supervisors of the district was controlled by developers, rather than by a governmental body. Although the IRS determination only applies to the Florida district, the ruling serves as a warning that the IRS could take the position that special purpose entities in other states that are entirely controlled by developers will not be able to issue tax-exempt bonds. Municipalities should consider steps to ensure that districts such as CIDs and TDDs are controlled by a governmental body, for example through requiring the Boards of Directors to include a majority consisting of municipal representatives. While there have always been good reasons to ensure limitation or municipal control of special purpose districts, this ruling provides yet another reason for municipalities to set up entities controlled by the municipality, both to avoid creating entities that could become adverse to the municipality and to avoid setting up an economic development incentive that ultimately might not provide a benefit developers typically seek--tax-exempt financing.