January 7, 1981
You inquire whether dividends from the NRTA-AARP U.S. Government Money Market Trust ("Fund") are subject to Massachusetts income tax and, if so, at what rate.
The Fund is a no-load open-end investment company (mutual fund) established as a Massachusetts business trust. The Fund invests in short-term obligations of the United States government, its agencies and its instrumentalities. The Fund intends to qualify as a regulated investment company for purposes of the Internal Revenue Code. The Fund sells its shares to members of the National Retired Teachers Association (NRTA) and the American Association of Retired Persons (AARP). Fund dividends are taxable federally to the shareholders as ordinary income.
Dividends payable to Massachusetts residents from the NRTA-AARP U.S. Government Money Market Trust are subject to Massachusetts income taxation as dividends at the rate of 10% plus surcharge.
Very truly yours
/s/L. Joyce Hampers
L. Joyce Hampers
Commissioner of Revenue
LJH:DMH:mf
LR 81-8

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