Invest With Confidence
T. Rowe Price
RAM LOGO
_____________________________________________________________________________
T. Rowe Price Tax-Free Funds, Inc. 100 East Pratt Street, Baltimore, MD 21202
July 24, 1998
Dear Investor:
We appreciate your recent inquiry about our tax-free municipal funds. Since
mailing the investment kit to you, we have discovered an incorrect statement in
the Tax-Free funds prospectus dated July 1, 1998, and want to bring it to
your attention.
On page 18, immediately under the heading "Tax Information," the prospectus
states that each fund's regular monthly dividends are expected to be exempt
from federal, state, and local income taxes. The reference to state and local
taxes was inserted in error. As noted throughout the "Fund, Market, and
Risk Characteristics" section near the beginning of the prospectus, the
funds' dividends should be exempt from federal income taxes only.
We regret this error and any inconvenience it may have caused you. If we can
answer any questions about these tax-free funds, please do not hesitate to
call us at 1-800-638-5660.
Sincerely,
/s/Mary J. Miller
Mary J. Miller
Director,
Municipal Bonds Department
This letter updates your July 1, 1998, T. Rowe Price Tax-Free Funds prospectus.