March 18, 1982

You inquire as to the Massachusetts income taxation of dividends paid by the ********** Tax Exempt Bond Fund in 1981.

The Fund assets, which are held in one multi-state portfolio, are invested in interest-bearing obligations of various states and their political subdivisions, agencies and instrumentalities. For federal tax purposes, dividends received from the Fund are "exempt interest dividends", as defined in Section 852(b)(5)(A) of the Internal Revenue Code and are not subject to federal taxation. The Fund has provided shareholders with a breakdown, for each state, of the percentage of the interest earned by the Fund in 1981 for each month and for the entire year from obligations of each state in which it invests. The Fund has indicated that on an annual basis 6.27% of the dividends are from Massachusetts tax exempt securities. On a monthly basis the amounts ranged from 4.81% to 7.75%.

Shareholders of the Fund who are subject to Massachusetts income taxation under General Laws Chapter 62, will not be required to include in their Massachusetts gross income that portion of their exempt interest dividends which is directly attributable to interest earned on tax-exempt Massachusetts obligations.

If you did not buy or sell any shares of the Fund during 1981, the annual percentage (6.27%) of your dividends is the amount exempt from taxation. If you made any purchases or sales during 1981, multiply the dividends you received each month by the appropriate monthly percentages to determine the amount exempt from Massachusetts taxation.

Very truly yours

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 82-23