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Help: State Income tax obligations from PRPFX -- Permanent Portfolio

edited April 2012 in Fund Discussions
Regards PRPFX,

I am trying to determine the percentage of dividends taxable by my state (PA). They sent me a 1099-Div, but no information about State Exclusions, as the other fund companies send.

Their website, in the 2011 Tax Guide says, "A statement may accompany your 1099-DIV indicating the percentage attributable directly to U.S. Gov. obligations" but that statement was not sent.

Does anyone know?

Thanks in advance

StevieG II


  • The user and all related content has been deleted.
  • According to PORPFX web site, 76.3138% of dividends were from U.S. Treasuries. Here is the link
  • Thanks both,

    Bob C: I did see that on the website, but that seems very high. Apparently at other companies, only a portion of US Gov funds are deductible.

    So, a follow-up question. What is the rationale for states allowing some parts of U.S. gov as deduction, and not other parts? (Yes, I know that varies with the state).

    P.S. They don't seem to have an email contact. I haven't yet had a chance to call.

    StevieG II
  • Can't answer why states exempt more federal agency interest from taxation than they're required to (i.e. state-to-state variation). As to why some interest but not all is state tax-exempt - whether interest is taxable depends on whether Congress chose to exempt the interest from state taxation.

    See The Doctrine of Federal Exemption From State Taxation. In broad terms, McCulloch v Maryland, 17 US 316 (1819) established that states cannot tax instrumentalities of the federal government. (McCulloch stood for so much more - the necessary and proper clause, the supremacy of the federal government, but the issue at hand was state taxation of the federal bank.) This was followed by various rulings that Congress could extend this exemption or voluntarily waive it for some federal agencies.

    So you'd likely have to check statutes to see which agencies are subject to state taxation, and which are not.
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