When you say "tax free" do you mean tax exempt? No that would not be reportable (type 9) You need to check the call code and be sure they got that right as well (those are often screwed up).
But, if you can make a case for CD value, you could take it as a CD Investment if you're smart
I take all CD tax exempt deals as investments verses loans. It of course depends on what you need most, but I don't know many banks who don't need the investment credit