N.Y. Pub. Auth. Law § 1862

§ 1862. Exemption from taxation of bonds and notes. The state\ncovenants with the purchasers and with all subsequent holders and\ntransferees of bonds and notes, in consideration of the acceptance of\nand payment for the bonds and notes, that the bonds and notes and the\nincome therefrom, and all moneys, funds and revenues pledged to pay or\nsecure the payment of such bonds and notes shall at all times be free\nfrom taxation, except for estate and gift taxes and taxes on transfers.\n