TAXPAYER SERVICE DIVISION FYI – For Your Information

1 PAGE 1 OF 4 INCOME 52 (01/05)Colorado Departmentof RevenueTaxpayer SERVICE Division1375 Sherman , Colorado 80261 Forms and other services:(303) 238-FAST (3278)Assistance:(303) 238-SERV (7378) SERVICE DIVISIONFYI For your InformationGENERAL INFORMATIONS tate and local municipal bond interest isexempt from federal tax and therefore isnot included in federal taxable incomereported on line 1 of the Colorado incometax return. However, this income istaxable in Colorado if it is from sourcesoutside of Colorado or from certain olderColorado municipal bonds. This interestmust be added to taxable income on theColorado return in the Additions toFederal Taxable Income section of Form104. [39-22-104(3)(b) ]The net amount of state and municipalbond interest to be added to taxableincome is the gross amount of the interestreduced by any bond premium amortiza-tion applicable to that income and anyexpenses required to be allocated to thatincome by the Internal Revenue COLORADO BONDSI nterest from bonds issued by the state ofColorado or any of its political subdivi-sions on or after May 1, 1980 is exemptfrom Colorado tax.

2 This income is nottaxable in Colorado and not added back toincome. The following types of obligationshave been determined to be exempt fromColorado income tax:1. 2-3-311 Bonds issued by a jointgovernmental agency of 11-56-113 Bonds issued underthe Public Securities Refunding 22-42-114 Colorado schooldistrict bonds issued on or after July1, 22-43-104 Colorado schooldistrict refunding bonds issued on orafter July 1, Bonds, notes andother obligations issued under author-ity of the Colorado student 23-5-105 Any bonds, certificatesor warrants issued by the governingboard of any state educational institu-tion for the purpose of obtaining fundsfor constructing, otherwise acquiring,and equipping housing facilities,dining facilities, recreational facilities,health facilities, and parking facilitiesfor the use of students and employeesof such Bonds or otherobligations issued under the ColoradoEducation Savings Program8.

3 23-15-118 Bonds, notes andother obligations issued under theauthority of the ColoradoPostsecondary Educational To Income For Non-ColoradoState and Local Bond InterestPAGE 2 OF 4 INCOME 52 (01/05)9. 23-20-122(13) Colorado Univer-sity Student Memorial Center 23-20-128 Anticipation war-rants issued by the University ofColorado to be repaid exclusively fromthe user revenue accruing to theUniversity of Colorado researchrevolving 23-20-129(5) Bonds issued bythe University of Colorado for thepurpose of obtaining funds for theplanning, construction or otheracquisition, and equipping of researchbuildings and facilities, whereverlocated in the state of Colorado, forthe University of 23-21-514 Bonds and otherobligations issued by the University ofColorado Hospital 23-31-127 Obligations issued byColorado State University for financ-ing the acquisition of facilities orequipment or both, for the ColoradoState University 23-31-133 Anticipation war-rants to be repaid exclusively fromthe user revenues accruing to theColorado State University researchbuilding revolving 23-31-134 Bonds issued by theBoard of Governors of the ColoradoState University 23-31-135 Obligations issued toraise money for the construction andacquisition of facilities or equipment,or both.

4 For the Colorado StateUniversity Veterinary 23-41-121 Anticipation war-rants to be repaid exclusively fromthe user revenues accruing to theColorado School of Mines researchbuilding revolving 23-70-110 Bonds, certificates,or warrants issued for the purpose ofraising funds for constructing,otherwise acquiring, and equippingdining facilities recreational facilities,health facilities, parking facilities,and student center facilities for theuse of students and employees at theAuraria Higher Education 23-71-514 Junior Collegedistrict bonds issued on or after July1, 23-71-604 Junior Collegedistrict refunding bonds issued on orafter July 1, 23-71-710 Bonds and othersecurities issued under the authorityof the Junior College RevenueSecurities Bonds, notes orother obligations issued by theStatewide Internet Portal 24-90-518 Bonds or otherobligations issued by a ColoradoLibrary 25-25-118 Bonds, notes orother obligations issued by theColorado Health Facilities 29-1-204 Bonds, notes andother obligations issued by a Bonds, notes andother obligations issued by a water ordrainage Bonds issued by amulti-jurisdictional housing 29-2-112(8) County, city orincorporated town capital improve-ment financing bonds to be repaid bysales and/or use tax 29-3-106 Bonds issued on orafter July 1, 1979 under the Countyand Municipality DevelopmentRevenue Bond 3 OF 4 INCOME 52 (01/05)30.

5 29-4-122 Bonds issued underauthority of the City Housing 29-4-227 Bonds issued underthe authority of the Housing Authori-ties 29-4-727 Bonds issued underthe authority of the Colorado HousingFinance Authority 29-23-114 Bonds or otherobligations issued by the Pueblo DepotActivity Development 30-11-307 Bonds issued by acounty authority related to 30-20-406 Water and sewerrevenue 30-20-533 Bonds issued by animprovement district under theauthority of the County Public Im-provement 30-20-903 Bonds issued by acounty authority related to solidwaste-to-energy incineration 30-26-508 Revenue bondsissued under authority of the CountyCapital improvement Trust FundFinancing 31-15-716 Bonds issued by amunicipal authority related 31-15-1003 Bonds issued by amunicipal authority related to solidwaste-to-energy incinerating 31-25-109 (7) Bonds issued by aColorado Urban Renewal 31-25-632 Bonds issued bypublic improvement 31-25-812 Revenue bondsissued by a Downtown 31-25-908(3) Revenue bondsissued by a municipal energy 31-35-406 Water and sewerrevenue 32-1-1101(1)(d) Special districtrevenue 32-1-1103(3)(h) Health SERVICE district revenue 32-1-1105 Bonds and other securities issued by a Tunnel 32-4-542(3)

6 Securities issued by Metropolitan Sewage Disposal 32-5-226 Hospital district bond and 33-60-110 Bonds issued by theState Board of the Great OutdoorsColorado Trust 35-75-117 Bonds, notes or otherobligations issued under authority ofthe Colorado Agricultural Develop-ment Authority 37-5-106 Bonds issued by aConservancy 37-45-138 Bonds issued by aWater Conservancy 37-90-134 Bonds issued by theboard of directors of a ground watermanagement 37-95-115 Bonds issued by theColorado Water Resources and PowerDevelopment 39-22-111(2) Obligations of theState of Colorado or a political subdivi-sion thereof, issued on or after May 1, 41-3-107 Bonds, notes, andother obligations issued by an author-ity created under the Public AirportAuthority 41-5-105 County AirportRevenue 43-4-509 Bonds issued by anauthority created under the PublicHighway Authority 43-4-618 Bonds issued by anauthority created under the RuralTransportation Authority 4 OF 4 INCOME 52 (01/05)FURTHER INFORMATIONFYIs, commonly used forms andadditional tax Information are availableon the Web at additional income tax informationvisit the "Tax Information Index" provide general Information concerning avariety of Colorado tax topics in simple andstraightforward language.

7 Although the FYIsrepresent a good faith effort to provideaccurate and complete tax Information , theinformation is not binding on the ColoradoDepartment of Revenue, nor does it replace,alter or supersede Colorado law and regula-tions. The Executive Director, who by statuteis the only person having authority to bind theDepartment, has not formally reviewed and/orapproved these FYIs.