Memo #
3783
TENNESSEE GOVERNOR SIGNS BILL ALLOWING PASS-THROUGH OF FEDERAL OBLIGATION INTEREST
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May 15, 1992
TO: TAX MEMBERS NO. 34-92
UNIT INVESTMENT TRUST MEMBERS NO. 30-92
MONEY MARKET MEMBERS - ONE PER COMPLEX NO. 6-92
RE: TENNESSEE GOVERNOR SIGNS BILL ALLOWING PASS-THROUGH OF
FEDERAL OBLIGATION INTEREST
__________________________________________________________
The Institute is pleased to inform you that the Governor of
Tennessee has signed legislation allowing the pass-through of
federal obligation interest effective as of January 1, 1992.
Under the law, dividends of a regulated investment company
("RIC"), distributions of a unit investment trust ("UIT"), and
earnings of a regulated investment company organized as a
partnership will be exempt from Tennessee tax to the extent that
they are derived from interest on federal obligations.
As we previously informed you, the legislation will also
have the effect of restoring the tax-exempt status of mutual fund
dividends and UIT distributions derived from interest on
Tennessee obligations. (See Institute Memorandum to Tax Members
No. 28-92, Unit Investment Trust Members No. 28-92 and Money
Market Members - One Per Complex No. 4-92, dated May 7, 1992.)
We will keep you informed of further developments.
David J. Mangefrida Jr.
Assistant Counsel - Tax