<PAGE>
PAGE 1
IDS State Tax-Exempt Funds
1996 annual report
(prospectus enclosed)
(Icon of) Column enclosed in shield
Tax-exempt funds from the following states:
California
Massachusetts
Michigan
Minnesota
New York
Ohio
Distributed by
American Express
Financial Advisors
Managed by IDS Life Insurance Company<PAGE>
PAGE 2
(Icon of) Column enclosed in shield
Twice the tax relief
Many people who want to reduce their tax burden favor municipal
bonds because the interest they pay is generally free from federal
tax. If you want to eliminate state tax, too, you can invest in
municipal bonds in the state you reside. This double tax-exemption
makes this one of the best tax-advantaged investments still
available to individuals. What's more, the money you invest is
typically used by municipalities to fund projects such as schools
and highways. So, with this investment, the benefits reach well
beyond your pocketbook.<PAGE>
PAGE 3
Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the Fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the Fund in detail.
1996 annual report
From the president 4
From the portfolio manager 5
Performance 6
California Tax-Exempt Fund 8
Ten largest holdings 8
Long-term performance 9
Massachusetts Tax-Exempt Fund 10
Ten largest holdings 10
Long-term performance 11
Michigan Tax-Exempt Fund 12
Ten largest holdings 12
Long-term performance 13
Minnesota Tax-Exempt Fund 14
Ten largest holdings 14
Long-term performance 15
New York Tax-Exempt Fund 16
Ten largest holdings 16
Long-term performance 17
Ohio Tax-Exempt Fund 18
Ten largest holdings 18
Long-term performance 19
All funds 20
Making the most of your fund 20
Independent auditors' report 23
Financial statements 24
Notes to financial statements 31
Investments in securities 40
IDS mutual funds 72
Federal income tax information 75
1996 prospectus
The Funds in brief 3p
Sales charge and Fund expenses 4p
Performance 8p
Investment policies and risks 24p
How to buy, exchange or redeem shares 31p
Special shareholder services 43p
Distributions and taxes 44p
How the funds are organized 49p
About American Express Financial Corporation 53p
Appendices 54p
<PAGE>
PAGE 4
To our shareholders
From the president
(Photo of) William R. Pearce
President of the Fund
If you're an experienced investor, you know that 1995 and the
opening months of 1996 were an unusually strong period for the
U.S. financial markets. Perhaps just as important, you also know
that history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility.
That fact reinforces the need for investors to periodically review
their long-term goals and examine whether their investment program
remains on track to achieving them. Your quarterly and annual
investment statements are one part of that monitoring process. The
other is a meeting with your American Express financial advisor.
That becomes even more important if there's a major change in your
financial situation or in the financial markets.
William R. Pearce<PAGE>
PAGE 5
From the portfolio manager
Reflecting an up-and-down bond market, IDS State Tax-Exempt Funds
soared in value during the first half of the fiscal year, then were
forced to give back some of their gains in the second half. All of
the Funds, however, generated positive total returns (net asset
value change plus income from investment operations) for the fiscal
year (July 1995 through June 1996 period).
Unlike 1994, when rising interest rates pummeled the bond market,
1995 could hardly have offered a better investment environment, as
the favorable forces of moderate economic growth and low inflation
remained in place. For the second half of the year (the first six
months of the Funds' fiscal period), those factors were
complemented by the possibility of an agreement to eventually
balance the federal budget and willingness on the part of the
Federal Reserve Board to reduce short-term interest rates.
Rates down, bond prices up
In that positive light, the interest income provided by bonds
became more attractive to investors. As they poured money into the
market, their buying drove long-term interest rates increasingly
lower. Because falling rates boost the value of previously issued
bonds, their prices rose, which in turn drove up the net asset
value of mutual funds such as these.
Our Funds were particularly well-positioned to benefit from the
rate decline because of an emphasis on municipal bonds with longer-
than-average maturities. (This strategy makes a portfolio more
sensitive to interest-rate swings. Therefore, when rates came
down, the Funds enjoyed enhanced performance.) As has been true
for some time, I emphasized investments in essential services
bonds, which typically provide more price stability than general
obligation bonds, which are more sensitive to fluctuations in the
economy.
The positive environment quickly turned negative in 1996, however,
as the budget negotiations broke down and the economy began showing
signs of renewed vigor. Professional bond traders took those
developments as precursors of high inflation -- bonds' eternal
nemesis -- and started a rash of selling in February and March that
drove up long-term interest rates to their highest levels in nearly
a year. Bond prices, which move in the opposite direction of
rates, slid substantially, taking the net asset value of funds such
as these with them.
To provide some cushion to net asset values during the downturn, I
shortened the average maturity of the bonds in the portfolios -- a
strategy that makes a portfolio less sensitive to interest-rate
moves. Among other portfolio modifications, after rates rose I
added some higher-yielding, lower-quality bonds and some non-rated
bonds to enhance the Funds' dividend payments. This is consistent
with my recent "barbell" approach to credit quality,
which is an emphasis on very high-quality bonds complemented by
some lower-quality issues. I believe this should allow the Funds
to generate healthy dividends with only a minimal sacrifice in
overall quality.<PAGE>
PAGE 6
State updates
Looking at individual states, there was no major news. In
California, municipal bonds recovered well from problems created by
financial difficulties in Orange and Los Angeles counties. (IDS
California Tax-Exempt Fund was largely unaffected by those events.)
Bond performance in New York and Michigan, on the other hand, was
tempered a bit in 1995 by concerns about the possibility of an
over-supply of bonds. Minnesota, Ohio and Massachusetts, however,
benefited from favorable supply/demand situations.
Paul B. Hylle<PAGE>
PAGE 7
To our shareholders
Performance
California
Class A
12 month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.15
June 30, 1995 $ 5.16
Decrease $(0.01)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.28
From capital gains $ 0.03
Total distributions $ 0.31
Total return* +6.0%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.15
June 30, 1995 $ 5.16
Decrease $(0.01)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.24
From capital gains $ 0.03
Total distributions $ 0.27
Total return* +5.2%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.15
June 30, 1995 $ 5.15
Increase $ --
Distributions
July 1, 1995-June 30, 1996
From income $ 0.29
From capital gains $ 0.03
Total distributions $ 0.32
Total return* +6.1%**
<PAGE>
PAGE 8
Massachusetts
Class A
12 month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.30
June 30, 1995 $ 5.27
Increase $ 0.03
Distributions
July 1, 1995-June 30, 1996
From income $ 0.28
From capital gains $ --
Total distributions $ 0.28
Total return* +6.0%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.30
June 30, 1995 $ 5.27
Increase $ 0.03
Distributions
July 1, 1995-June 30, 1996
From income $ 0.24
From capital gains $ --
Total distributions $ 0.24
Total return* +5.2%**
Class Y
12-month period
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.32
June 30, 1995 $ 5.28
Increase $ 0.04
Distributions
July 1, 1995-June 30, 1996
From income $ 0.29
From capital gains $ --
Total distributions $ 0.29
Total return* +6.1%**
<PAGE>
PAGE 9
Michigan
Class A
12 month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.36
June 30, 1995 $ 5.39
Decrease $(0.03)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.30
From capital gains $ 0.07
Total distributions $ 0.37
Total return* +6.3%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.36
June 30, 1995 $ 5.39
Decrease $(0.03)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.25
From capital gains $ .07
Total distributions $ 0.32
Total return* +5.6%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.38
June 30, 1995 $ 5.41
Decrease $(0.03)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.30
From capital gains $ 0.07
Total distributions $ 0.37
Total return* +6.4%**
*The prospectus discusses the effect of the sales charges, if any,
on the various classes.
**The total return is a hypothetical investment in the Fund with
all distributions reinvested.
<PAGE>
PAGE 10
Minnesota
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.20
June 30, 1995 $ 5.19
Increase $ 0.01
Distributions
July 1, 1995-June 30, 1996
From income $ 0.30
From capital gains $ --
Total distributions $ 0.30
Total return* +5.9%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.20
June 30, 1995 $ 5.19
Increase $ 0.01
Distributions
July 1, 1995-June 30, 1996
From income $ 0.26
From capital gains $ --
Total distributions $ 0.26
Total return* +5.2%**
Class Y
12-month period
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.21
June 30, 1995 $ 5.20
Increase $ 0.01
Distributions
July 1, 1995-June 30, 1996
From income $ 0.31
From capital gains $ --
Total distributions $ 0.31
Total return* +6.1%**
<PAGE>
PAGE 11
New York
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.06
June 30, 1995 $ 5.09
Decrease $(0.03)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.29
From capital gains $ --
Total distributions $ 0.29
Total return* +5.2%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.06
June 30, 1995 $ 5.09
Decrease $(0.03)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.25
From capital gains $ --
Total distributions $ 0.25
Total return* +4.4%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.07
June 30, 1995 $ 5.11
Decrease $(0.04)
Distributions
July 1, 1995-June 30, 1996
From income $ 0.30
From capital gains $ --
Total distributions $ 0.30
Total return* +5.4%**
<PAGE>
PAGE 12
Ohio
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.28
June 30, 1995 $ 5.28
Increase $ --
Distributions
July 1, 1995-June 30, 1996
From income $ 0.29
From capital gains $ 0.01
Total distributions $ 0.30
Total return* +5.7%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.28
June 30, 1995 $ 5.28
Increase $ --
Distributions
July 1, 1995-June 30, 1996
From income $ 0.24
From capital gains $ 0.01
Total distributions $ 0.25
Total return* +5.0%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
June 30, 1996 $ 5.29
June 30, 1995 $ 5.28
Increase $ 0.01
Distributions
July 1, 1995-June 30, 1996
From income $ 0.30
From capital gains $ 0.01
Total distributions $ 0.31
Total return* +5.9%**
*The prospectus discusses the effects of sales charge, if any, on
the various classes.
**The total return is a hypothetical investment in the fund with
all distributions reinvested.<PAGE>
PAGE 13
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS California Tax-Exempt Fund
(pie chart) The ten holdings listed here make up 26.59% of the Fund's net assets
_____________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of June 30, 1996)
_____________________________________________________________________________________
<S> <C> <C>
Anaheim Public Finance Authority Revenue Bonds
2nd Series Electric Utilities San Juan
5.75% 2022 4.52% $10,877,889
Sacramento Municipal Utility District Series R
6.00% 2015-2017 3.09 7,427,775
Long Beach Harbor Revenue Bonds Series 1989A A.M.T.
7.25% 2019 3.08 7,421,960
Los Angeles Department of Water & Power Electric Plant
Revenue Bonds Series 1990
7.125% 2030 2.97 7,136,935
Statewide Community Development Authority Revenue
Certificate of Participation St. Joseph Health System Group
6.50% 2015 2.37 5,692,115
Los Angeles Convention & Exhibition Center
Pre-Refunded Certificate of Participation Series 1989A
7.00% 2020 2.26 5,446,000
University of Southern California Educational Facilities Authority
Pre-Refunded Revenue Bonds Series 1989B
6.75% 2015 2.21 5,321,350
San Diego Regional Transportation Commission Sales Tax
Pre-Refunded Revenue Bonds Limited Tax Series 1989A
6.25% 2008 2.19 5,271,490
Statewide Community Development Authority Health Facilities
Revenue Bonds Unihealth America Series 1993A Inverse Floater
7.32% 2011 2.01 4,825,000
Rancho Mirage Joint Powers Finance Authority Certificate of Participation
Eisenhower Memorial Hospital
7.00% 2022 1.89 4,535,430
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T.).
</TABLE>
<PAGE>
PAGE 14
The Fund's long-term performance
IDS California Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by
the Fund exceed losses
o you receive income when the Fund's interest dividends and short-
term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS California Tax-Exempt Fund
$17,971
Lehman Total Return California
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
9/1/86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total returns
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +0.70% +5.86% +6.15%
Class B** +0.19% --% +1.52%
Class Y** +6.11% --% +5.06%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
Assumes: Holding period from 9/1/86 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gains distributions for the fund, with a value of $8,217.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing California Tax-Exempt Fund to this index, you
should take into account the fact that the Fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charge
that you pay would reduce your total return as well.
<PAGE>
PAGE 15
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
<PAGE>
PAGE 16
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Massachusetts Tax-Exempt Fund
(pie chart) The ten holdings here make up 27.14% of the Fund's net assets.
_____________________________________________________________________________________
Percent Value
(of Fund's net assets)(as of June 30, 1996)
_____________________________________________________________________________________
<S> <C> <C>
Boston City Hospital Refunding Revenue Bonds
Series B
5.75% 2023 3.94% $2,885,250
Health & Educational Facilities Authority
Revenue Bonds Suffolk University Series B
6.35% 2022 3.46 2,538,787
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System Series A
5.25% 2021 3.10 2,269,100
Health & Educational Facilities Authority
Revenue Bonds Boston College Series J
6.625% 2021 2.87 2,103,300
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison Series 1993
5.875% 2008 2.63 1,928,180
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Series 1991B
7.25% 2013 2.52 1,851,133
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
9.00% 2015 2.25 1,653,300
Bay Transportation Authority General Transportation
System Refunding Bonds Series 1992B
6.20% 2016 2.15 1,575,135
Municipal Wholesale Electric Power Supply System
Pre-Refunding Revenue Bonds Series 1992
6.75% 2017 2.12 1,554,951
Municipal Wholesale Electric Power Supply System
Refunding Revenue Bonds Series B
4.75% 2011 2.10 1,541,855
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T.).
</TABLE>
<PAGE>
PAGE 17
The Fund's long-term performance
IDS Massachusetts Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's interest dividends and
short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS Massachusetts Tax-Exempt Fund
$17,521
Lehman Total Return Massachusetts
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
8/1/87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +0.67% +6.06% +6.38%
Class B** +0.19% --% +1.62%
Class Y** +6.08% --% +5.38%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
Assumes: Holding period from 8/1/87 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gains distributions for the Fund, with a value of $7,359.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing Massachusetts Tax-Exempt Fund to this index,
you should take into account the fact that the fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charge
that you pay would reduce your total return as well.
<PAGE>
PAGE 18
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 19
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Michigan Tax-Exempt Fund
(pie chart) The ten holdings listed here make up 24.65% of the Fund's net assets
______________________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of June 30, 1996)
______________________________________________________________________________________________
<S> <C> <C>
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds
5.75% 2022 3.02% $2,466,675
State Building Authority Refunding Revenue Bonds
Series 1991I
6.25% 2020 2.71 2,216,302
Johannesburg-Lewiston Area Schools Building & Site
General Obligation Bonds Unlimited Tax
5.00% 2016 2.67 2,180,938
Eaton County Water System Limited Tax
General Obligation Bonds
5.00% 2013 2.46 2,007,808
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
McLaren Obligated Group Series 1991A
7.50% 2021 2.44 1,993,687
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi 2 Plants Series CC A.M.T.
7.50% 2019 2.36 1,924,545
Detroit Sewer Disposal Revenue Bonds
5.70% 2023 2.31 1,887,180
Grand Ledge Public Schools Unlimited Tax General Obligation
Refunding Bonds Counties of Eaton, Clinton & Ionia Series 1995
5.375% 2024 2.28 1,859,700
State Strategic Fund Limited Tax Obligation
Refunding Revenue Bonds Ford Motor Series 1991A
7.10% 2006 2.27 1,857,075
Battle Creek Water Supply System
Pre-Refunded Revenue Bonds Series 1990B
6.375% 2008-2010 2.13 1,740,171
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T).
</TABLE>
<PAGE>
PAGE 20
The Fund's long-term performance
IDS Michigan Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's interest dividends and
short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS Michigan Tax-Exempt Fund
$18,046
Lehman Total Return Michigan
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
8/1/87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +1.04% +6.33% +6.66%
Class B** +0.57% --% +1.78%
Class Y** +6.45% --% +5.56%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
Assumes: Holding period from 8/1/87 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gains distributions for the Fund, with a value of $7,706.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing Michigan Tax-Exempt Fund to this index, you
should take into account the fact that the Fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charge
that you pay would reduce your total return as well.
<PAGE>
PAGE 21
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
The Fund's ten largest holdings
PAGE 22
<TABLE>
<CAPTION>
IDS Minnesota Tax-Exempt Fund
(pie chart) The ten holdings listed here make up 20.75% of the Fund's net assets
____________________________________________________________________________________
Percent Value
(of Fund's net assets) (as of June 30, 1996)
____________________________________________________________________________________
<S> <C> <C>
Minneapolis & St. Paul Housing & Redevelopment Authority
Health Care System Revenue Bonds Healthspan
Series 1993
4.75% 2018 2.80% $11,450,295
St. Paul & Minneapolis Housing & Redevelopment Authority
Health Care Facility Revenue Bonds
Group Health Plan Series 1992
6.75% 2013 2.76 11,273,115
State General Obligation Various Purpose Pre-Refunded Bonds
Series 1991
6.70% 2011 2.12 8,690,240
State General Obligation Various Purpose Pre-Refunded Bonds
Series 1990
7.00% 2009 2.08 8,511,519
Anoka County General Obligation Capital Improvement
Revenue Bonds Series 1989B
7.00% 2007-2010 2.05 8,371,032
Hennepin County Lease Revenue
Certificate of Participation Series 1991
6.80% 2017 1.91 7,819,488
Western Minnesota Municipal Power Agency Supply
Refunding Revenue Bonds Series 1987A
7.00% 2013 1.84 7,537,177
Edina Multi-family Housing Revenue Bonds
Walker Assisted Living Series 1991
9.00% 2031 1.79 7,311,978
St. Paul Housing & Redevelopment Authority Sales Tax
Revenue Bonds Civic Center
5.55% 2023 1.72 7,036,125
Faribault Rice & Goodhue County Independent School District #656
General Obligation School Building Bonds Series 1995
5.75% 2015 1.68 6,875,988
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T.).
</TABLE>
<PAGE>
PAGE 23
The Fund's long-term performance
IDS Minnesota Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's interest dividends and
short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS Minnesota Tax-Exempt Fund
$18,008
Lehman Total Return Minnesota
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
9/1/86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +0.63% +5.77% +6.36%
Class B** +0.20% --% +1.66%
Class Y** +6.14% --% +5.36%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
Assumes: Holding period from 9/1/86 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gains distributions for the Fund, with a value of $8,339.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing Minnesota Tax-Exempt Fund to this index, you
should take into account the fact that the Fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charge
that you pay would reduce your total return as well.
<PAGE>
PAGE 24
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 25
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS New York Tax-Exempt Fund
(pie chart) The ten holdings listed here make up 33.65% of the Fund's net assets
______________________________________________________________________________________
Percent Value
(of Fund's net assets)(as of June 30, 1996)
______________________________________________________________________________________
<S> <C> <C>
State Energy Research & Development Authority
Electric Facility Revenue Bonds Consolidated Edison
Series 1990A A.M.T.
7.50% 2025 4.47% $5,370,800
State Urban Development Correction Facility
Pre-Refunded Revenue Bonds Series 1
7.50% 2020 4.16 4,999,725
State Local Government Assistance Pre-Refunded Bonds
Series 1991A
7.00% 2016 3.71 4,464,680
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A
6.00% 2026 3.69 4,432,275
State Mortgage Agency Homeowner Mortgage Revenue Bonds
Series TT
7.50% 2015 3.53 4,238,440
State Dormitory Authority City University System
Pre-Refunded Revenue Bonds
8.125% 2017 3.01 3,615,798
Battery Park City Authority Senior Refunding Revenue Bonds
Series 1993A
5.25% 2017 2.96 3,557,600
Triborough Bridge & Tunnel Authority General Purpose
Pre-Refunded Revenue Bonds Series S
7.00% 2021 2.76 3,322,920
State Environmental Facility State Water & Pollution Control
Revolving Fund Revenue Bonds New York City Municipal Water
Finance Authority Series 1990A
7.50% 2012 2.74 3,300,210
State Mortgage Agency Homeowner Mortgage Revenue Bonds
Series 27
6.90% 2015 2.62 3,155,670
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T.).
</TABLE>
<PAGE>
PAGE 26
The Fund's long-term performance
IDS New York Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's interest dividends and
short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS New York Tax-Exempt Fund
$17,622
Lehman Total Return New York
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
9/1/86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +0.03% +5.76% +5.94%
Class B** +0.55% --% +0.48%
Class Y** +5.35% --% +4.33%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
Assumes: Holding period from 9/1/86 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gains distributions for the Fund, with a value of $8,035.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing New York Tax-Exempt Fund to this index, you
should take into account the fact that the Fund's performance
reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charge
that you pay would reduce your total return as well.
<PAGE>
PAGE 27
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 28
<TABLE>
<CAPTION>
The Fund's ten largest holdings
IDS Ohio Tax-Exempt Fund
(pie chart) The ten holdings listed here make up 25.80% of the Funds's net assets
___________________________________________________________________________________________
Percent Value
(of Fund's net assets)(as of June 30, 1996)
___________________________________________________________________________________________
<S> <C> <C>
Erie County Hospital Improvement Refunding Revenue Bonds
Firelands Community Hospital Series 1992
6.75% 2015 2.83% $2,088,380
Lakota Local School District Unlimited Tax Improvement
General Obligation Bonds
6.25% 2014 2.81 2,073,340
State Air Quality Development Authority
Refunding Revenue Bonds Series 1994 A.M.T.
6.375% 2029 2.79 2,059,700
Dayton Intl Airport Refunding Revenue Bonds
5.25% 2015 2.55 1,879,360
Lorain County Hospital Facilities Refunding Revenue Bonds
EMH Regional Medical Center Series 1995
5.375% 2021 2.53 1,872,600
State Municipal Electric Generation Agency Joint Venture #5
Revenue Bonds
5.375% 2024 2.53 1,867,880
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds
Counties of Adams & Highland Series 1995
5.25% 2021 2.51 1,854,580
Butler County Hospital Facility Improvement
Refunding Revenue Bonds
7.50% 2010 2.51 1,854,125
Lucas County Hospital Refunding Revenue Bonds
St. Vincent's Medical Center Series B
5.25% 2020 2.49 1,836,080
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation Pre-Refunded Bonds
7.00% 2019 2.25 1,660,110
Note: Certain of the Fund's investment income may be subject to the Alternative Minimum Tax (A.M.T.).
</TABLE>
<PAGE>
PAGE 29
The Fund's long-term performance
IDS Ohio Tax-Exempt Fund
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the Fund's interest dividends and
short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gains distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS Ohio Tax-Exempt Fund
$17,637
Lehman Total Return Ohio
$10,000 Muni Index Tax-Exempt Fund
$ 9,500 Class A
8/1/87 '88 '89 '90 '91 '92 '93 '94 '95 '96
Average annual total return
(as of June 30, 1996)
Since
1 year 5 years inception
Class A* +0.47% +5.89% +6.37%
Class B** +0.04% --% +1.27%
Class Y** +5.86% --% +4.73%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
Assumes: Holding period from 9/1/86 to 6/30/96. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the Fund's current prospectus. Reinvestment of all income and
capital gains distributions for the Fund, with a value of $7,432.
The Lehman Total Return Muni Index is an unmanaged list of
municipal bonds used as a general measure of market performance.
On the graph above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Total Return Muni
Index. In comparing Ohio Tax-Exempt Fund to this index, you should
take into account the fact that the Fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual bonds or bond mutual funds, any sales charge that you
pay would reduce your total return as well.
<PAGE>
PAGE 30
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 31
Making the most of the Fund
California Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since inception
Class A* +0.70% +5.86% +6.15%
Class B** +0.19% --% +1.52%
Class Y** +6.11% --% +5.06%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
Massachusetts Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since inception
Class A* +0.67% +6.06% +6.38%
Class B** +0.19% --% +1.62%
Class Y** +6.08% --% +5.38%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
Michigan Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since inception
Class A* +1.04% +6.33% +6.66%
Class B** +0.57% --% +1.78%
Class Y** +6.45% --% +5.56%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
The performance of Class B and Class Y will vary from the
performance of Class A based on differences in sales charges and
fees. Your investment and return values fluctuate so that your
shares, when redeemed, may be worth more or less than the original
cost. Figures include the effect of the maximum sales charge as
discussed in the prospectus. This was a period of widely
fluctuating security prices. Past performance is no guarantee of
future results.
<PAGE>
PAGE 32
Minnesota Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since Inception
Class A* +0.63% +5.77% +6.36%
Class B** +0.20% --% +1.66%
Class Y** +6.14% --% +5.36%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
New York Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since inception
Class A* +0.03% +5.76% +5.94%
Class B** +0.55% --% +0.48%
Class Y** +5.35% --% +4.33%
*Inception date was Aug. 18, 1986.
**Inception date was March 20, 1995.
Ohio Tax-Exempt Fund - average annual total return
(June 30, 1996)
1 year 5 years Since inception
Class A* +0.47% +5.89% +6.37%
Class B** +0.04% --% +1.27%
Class Y** +5.86% --% +4.73%
*Inception date was July 2, 1987.
**Inception date was March 20, 1995.
The performance of Class B and Class Y will vary from the
performance of Class A based on differences in sales charges and
fees. Your investment and return values fluctuate so that your
shares, when redeemed, may be worth more or less than the original
cost. Figures include the effect of the maximum sales charge as
discussed in the prospectus. This was a period of widely
fluctuating security prices. Past performance is no guarantee of
future results.
<PAGE>
PAGE 33
Making the most of the Fund
Build your assets systematically
To keep your assets growing steadily, one of the best ways to use
the Fund is by dollar-cost averaging -- a time-tested strategy that
can make market fluctuations work for you. To dollar-cost average,
simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the Fund's share price is low,
fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan. $100 $20 5.00
Feb. 100 18 5.56
Mar. 100 17 5.88
Apr. 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug. 100 19 5.26
Sept. 100 21 4.76
Oct. 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low...
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
<PAGE>
PAGE 34
__________________________________________________________________
Independent auditors' report
The board and shareholders
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments in securities,
of IDS California Tax-Exempt Fund (a fund within IDS California
Tax-Exempt Trust), and IDS Massachusetts Tax-Exempt Fund, IDS
Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New
York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund (funds within IDS
Special Tax-Exempt Series Trust) as of June 30, 1996, the related
statements of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period
then ended, the financial highlights for each of the years in the
seven-year period ended June 30, 1996, the six months ended June
30, 1989, each of the years in the two-year period ended December
31, 1988, and the period from August 18, 1986 (commencement of
operations), to December 31, 1986, of IDS California Tax-Exempt
Fund, IDS Minnesota Tax-Exempt Fund and IDS New York Tax-Exempt
Fund; and the financial highlights for each of the years in the
nine-year period ended June 30, 1996, of IDS Massachusetts Tax-
Exempt Fund, IDS Michigan Tax-Exempt Fund and IDS Ohio Tax-Exempt
Fund. These financial statements and the financial highlights are
the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold but not received or delivered, we request confirmations from
brokers, and where replies are not received, we carry out other
appropriate auditing procedures. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
<PAGE>
PAGE 35
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
California Tax-Exempt Fund, IDS Massachusetts Tax-Exempt Fund, IDS
Michigan Tax-Exempt Fund, IDS Minnesota Tax-Exempt Fund, IDS New
York Tax-Exempt Fund and IDS Ohio Tax-Exempt Fund at June 30, 1996,
and the results of their operations for the year then ended, the
changes in their net assets for each of the years in the two-year
period ended, and the financial highlights for the periods stated
in the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 2, 1996
<PAGE>
PAGE 36
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
June 30, 1996
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1)
(identified cost $219,312,804, $68,878,578
and $75,801,580) $234,980,999 $72,057,717 $80,439,025
Cash in bank on demand deposit 1,013,026 736,750 --
Accrued interest receivable 4,515,580 1,525,236 1,320,519
Receivable for investment securities sold 107,531 25,313 28,687
_____________________________________________________________________________________________________________________________
Total assets 240,617,136 74,345,016 81,788,231
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit -- -- 59,689
Dividends payable to shareholders 51,808 20,083 18,090
Payable for investment securities purchased -- 965,203 --
Accrued investment management services fee 3,068 936 1,042
Accrued distribution fee 130 113 53
Accrued service fee 1,143 348 388
Accrued transfer agency fee 258 127 115
Accrued administrative services fee 261 80 89
Other accrued expenses 45,778 30,101 35,867
_____________________________________________________________________________________________________________________________
Total liabilities 102,446 1,016,991 115,333
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $240,514,690 $73,328,025 $81,672,898
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest -- $.01 par value,
unlimited number of shares authorized $ 467,134 $ 138,353 $ 152,273
Additional paid-in-capital 232,195,182 71,392,078 78,354,771
Undistributed net investment income 1,254 6,316 (3,116)
Accumulated net realized loss (Notes 1 and 6) (8,112,325) (1,467,048) (1,559,130)
Unrealized appreciation (Note 5) 15,963,445 3,258,326 4,728,100
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $240,514,690 $73,328,025 $81,672,898
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $234,115,579 $67,765,538 $79,074,832
Class B $ 6,398,039 $ 5,561,413 $ 2,596,990
Class Y $ 1,072 $ 1,074 $ 1,076
Outstanding shares of beneficial interest: Class A shares 45,470,271 12,785,695 14,742,952
Class B shares 1,242,929 1,049,378 484,188
Class Y shares 208 202 200
Net asset value per share: Class A $ 5.15 $ 5.30 $ 5.36
Class B $ 5.15 $ 5.30 $ 5.36
Class Y $ 5.15 $ 5.32 $ 5.38
See accompanying notes to financial statements.
<PAGE>
PAGE 37
Financial statements
Statements of assets and liabilities
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
June 30, 1996
_____________________________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
____________________________________________________________________________________________________________________________
Investments in securities, at value (Note 1)
(identified cost $383,139,342, $111,208,011
and $69,340,999) $400,295,278 $117,902,996 $72,981,281
Cash in bank on demand deposit 379,599 20,240 --
Accrued interest receivable 8,351,576 2,332,411 1,012,178
Receivable for investment securities sold 242,719 54,000 27,000
_____________________________________________________________________________________________________________________________
Total assets 409,269,172 120,309,647 74,020,459
_____________________________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit -- -- 153,982
Dividends payable to shareholders 126,049 35,710 21,942
Accrued investment management services fee 5,111 1,534 944
Accrued distribution fee 324 101 45
Accrued service fee 1,943 571 351
Accrued transfer agency fee 625 188 110
Accrued administrative services fee 422 130 80
Other accrued expenses 78,735 39,933 24,725
_____________________________________________________________________________________________________________________________
Total liabilities 213,209 78,167 202,179
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares $409,055,963 $120,231,480 $73,818,280
_____________________________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________________________
Shares of beneficial interest -- $.01 par value,
unlimited number of shares authorized $ 787,347 $ 237,478 $ 139,732
Additional paid-in-capital 401,826,541 117,466,739 72,107,198
Undistributed net investment income 11,951 (11) 695
Accumulated net realized loss (Notes 1 and 6) (11,210,593) (4,337,180) (2,155,221)
Unrealized appreciation (Note 5) 17,640,717 6,864,454 3,725,876
_____________________________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding shares $409,055,963 $120,231,480 $73,818,280
_____________________________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $392,966,276 $115,274,794 $71,628,090
Class B $ 16,088,609 $ 4,955,626 $ 2,189,121
Class Y $ 1,078 $ 1,060 $ 1,069
Outstanding shares of beneficial interest: Class A shares 75,637,575 22,768,781 13,558,632
Class B shares 3,096,878 978,780 414,378
Class Y shares 207 209 202
Net asset value per share: Class A $ 5.20 $ 5.06 $ 5.28
Class B $ 5.20 $ 5.06 $ 5.28
Class Y $ 5.21 $ 5.07 $ 5.29
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 38
<TABLE>
<CAPTION>
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30, 1996
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Income:
Interest $14,969,221 $4,486,909 $5,028,983
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 1,138,491 344,729 381,069
Distribution fee -- Class B 29,809 28,726 13,434
Transfer agency fee 96,983 46,478 42,691
Incremental transfer agency fee -- Class B 196 169 80
Service fee
Class A 414,609 121,350 137,607
Class B 6,894 6,663 3,115
Administrative services fee 97,114 30,015 32,431
Compensation of board members 6,376 6,411 5,788
Compensation of officers 2,465 930 561
Custodian fees 100,438 5,630 23,266
Postage 16,475 5,355 3,597
Registration fees 27,954 24,903 33,241
Reports to shareholders 17,235 17,338 7,523
Audit fees 16,500 15,250 16,315
Administrative 1,896 2,583 987
Other 3,222 7,004 2,979
_____________________________________________________________________________________________________________________________
Total expenses 1,976,657 663,534 704,684
Earnings credits on cash balances (Note 2) (100,484) (7,768) (23,235)
_____________________________________________________________________________________________________________________________
Total net expenses 1,876,173 655,766 681,449
_____________________________________________________________________________________________________________________________
Investment income -- net 13,093,048 3,831,143 4,347,534
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 997,822 102,823 318,118
Net realized loss on closed interest rate futures contracts (537,999) (22,179) (17,177)
Net realized gain on exercised option contracts written (Note 7) 93,436 14,910 15,904
_____________________________________________________________________________________________________________________________
Net realized gain on investments 553,259 95,554 316,845
Net change in unrealized appreciation or depreciation 323,151 202,491 274,473
_____________________________________________________________________________________________________________________________
Net gain on investments 876,410 298,045 591,318
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting from operations $13,969,458 $4,129,188 $ 4,938,852
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 39
Financial statements
Statements of operations
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30, 1996
_____________________________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________________________
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
_____________________________________________________________________________________________________________________________
Income:
Interest $26,512,346 $7,798,801 $4,675,409
_____________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 1,895,243 578,413 355,739
Distribution fee -- Class B 71,223 27,377 11,346
Transfer agency fee 234,593 71,670 41,628
Incremental transfer agency fee -- Class B 509 198 97
Service fee
Class A 698,714 207,892 128,837
Class B 16,613 6,387 2,647
Administrative services fee 156,621 49,226 30,276
Compensation of board members 8,036 7,000 6,949
Compensation of officers 5,121 1,170 672
Custodian fees 138,999 5,219 19,411
Postage 32,635 13,794 6,134
Registration fees 30,583 32,707 25,367
Reports to shareholders 35,566 14,838 7,395
Audit fees 17,500 16,500 16,129
Administrative 1,555 1,171 412
Other 15,694 6,139 1,401
_____________________________________________________________________________________________________________________________
Total expenses 3,359,205 1,039,701 654,440
Earnings credits on cash balances (Note 2) (111,580) (3,793) (19,403)
_____________________________________________________________________________________________________________________________
Total net expenses 3,247,625 1,035,908 635,037
_____________________________________________________________________________________________________________________________
Investment income -- net 23,264,721 6,762,893 4,040,372
_____________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________________________
Net realized gain (loss) on security transactions (Note 3) 609,392 153,907 (440,823)
Net realized loss on closed interest rate futures contracts (185,775) (537,433) (25,608)
Net realized gain on exercised or expired option contracts written (Note 7) 88,466 70,574 15,904
______________________________________________________________________________________________________________________________
Net realized gain (loss) on investments 512,083 (312,952) (450,527)
Net change in unrealized appreciation or depreciation 20,022 (271,393) 579,615
_____________________________________________________________________________________________________________________________
Net gain (loss) on investments 532,105 (584,345) 129,088
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting from operations $23,796,826 $6,178,548 $4,169,460
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 40
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions
_____________________________________________________________________________________________________________________________
1996 1995 1996 1995
California Massachusetts
Tax-Exempt Fund Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income -- net $13,093,048 $ 14,306,975 $3,831,143 $ 3,941,356
Net realized gain (loss) on investments 553,259 (4,035,813) 95,554 (1,258,540)
Net change in unrealized appreciation or depreciation 323,151 4,486,171 202,491 1,474,819
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 13,969,458 14,757,333 4,129,188 4,157,635
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (12,910,349) (14,290,556) (3,652,150) (3,926,867)
Class B (184,985) (16,509) (172,619) (14,479)
Class Y (59) (11) (58) (10)
Net realized gain on securities
Class A (1,353,174) -- -- --
Class B (20,647) -- -- --
Class Y (6) -- -- --
_____________________________________________________________________________________________________________________________
Total distributions (14,469,220) (14,307,076) (3,824,827) (3,941,356)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 23,553,539 22,693,617 11,006,959 10,352,839
Class B shares 5,187,208 2,091,151 4,389,565 1,991,573
Class Y shares -- 1,020 -- 1,021
Reinvestment of distributions at net asset value
Class A shares 10,071,411 9,854,175 2,835,364 3,023,192
Class B shares 184,290 13,558 149,356 12,005
Class Y shares 65 11 58 10
Payments for redemptions
Class A shares (38,384,549) (48,910,065) (14,679,805) (17,395,360)
Class B shares (Note 2) (960,392) (27,600) (790,581) (137,393)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions (348,428) (14,284,133) 2,910,916 (2,152,113)
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets (848,190) (13,833,876) 3,215,277 (1,935,834)
Net assets at beginning of year 241,362,880 255,196,756 70,112,748 72,048,582
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
of $1,254 and $2,661 for IDS California, and
$6,316 and $0 for IDS Massachusetts) $240,514,690 $241,362,880 $73,328,025 $70,112,748
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 41
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions
______________________________________________________________________________________________________________________________
1996 1995 1996 1995
Michigan Minnesota
Tax-Exempt Fund Tax-Exempt Fund
______________________________________________________________________________________________________________________________
Investment income -- net $4,347,534 $ 4,389,687 $ 23,264,721 $ 23,929,961
Net realized gain (loss) on investments 316,845 (518,081) 512,083 (9,227,466)
Net change in unrealized appreciation or depreciation 274,473 1,141,073 20,022 10,495,908
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 4,938,852 5,012,679 23,796,826 25,198,403
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (4,267,908) (4,384,843) (22,792,618) (23,900,319)
Class B (83,171) (4,833) (470,510) (29,555)
Class Y (59) (11) (62) (11)
Net realized gain
Class A (1,011,041) (36,289) (300,980) --
Class B (21,404) -- (6,713) --
Class Y (13) -- (1) --
_____________________________________________________________________________________________________________________________
Total distributions (5,383,596) (4,425,976) (23,570,884) (23,929,885)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 7,791,545 12,053,759 43,579,588 57,985,486
Class B shares 1,729,504 997,872 12,784,665 4,124,509
Class Y shares -- 1,020 -- 1,020
Reinvestment of distributions at net asset value
Class A shares 3,972,887 3,277,481 18,480,819 18,880,977
Class B shares 85,004 4,262 401,374 24,745
Class Y shares 72 11 63 11
Payment for redemptions
Class A shares (9,793,095) (15,101,862) (72,296,842) (83,747,345)
Class B shares (Note 2) (166,982) (3,353) (1,011,844) (36,354)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions 3,618,935 1,229,190 1,937,823 (2,766,951)
______________________________________________________________________________________________________________________________
Total increase (decrease) in net assets 3,174,191 1,815,893 2,163,765 (1,498,433)
Net assets at beginning of year 78,498,707 76,682,814 406,892,198 408,390,631
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
of $(3,116) and $2,198 for IDS Michigan, and
$11,951 and $10,692 for IDS Minnesota) $81,672,898 $78,498,707 $409,055,963 $406,892,198
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 42
Financial statements
Statements of changes in net assets
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
Year ended June 30,
_____________________________________________________________________________________________________________________________
Operations and distributions
_____________________________________________________________________________________________________________________________
1996 1995 1996 1995
New York Ohio
Tax-Exempt Fund Tax-Exempt Fund
_____________________________________________________________________________________________________________________________
Investment income -- net $ 6,762,893 $ 7,058,619 $4,040,372 $ 4,061,670
Net realized loss on investments (312,952) (2,824,160) (450,527) (1,262,593)
Net change in unrealized appreciation or depreciation (271,393) 1,994,739 579,615 1,448,594
_____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 6,178,548 6,229,198 4,169,460 4,247,671
_____________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (6,587,794) (7,042,080) (3,934,612) (4,092,348)
Class B (175,051) (16,527) (69,847) (5,227)
Class Y (59) (12) (58) (11)
Net realized gain
Class A -- -- (133,990) --
Class B -- -- (3,014) --
Class Y -- -- (2) --
_____________________________________________________________________________________________________________________________
Total distributions (6,762,904) (7,058,619) (4,141,523) (4,097,586)
_____________________________________________________________________________________________________________________________
Share transactions (Note 4)
_____________________________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 9,808,292 16,050,177 6,884,856 12,347,956
Class B shares 3,827,013 1,923,002 1,761,407 715,678
Class Y shares -- 1,020 -- 1,020
Reinvestment of distributions at net asset value
Class A shares 5,179,004 5,362,620 3,192,425 3,162,750
Class B shares 158,781 12,791 64,381 3,706
Class Y shares 59 12 60 11
Payments for redemptions
Class A shares (18,878,694) (21,072,998) (11,876,308) (14,135,624)
Class B shares (Note 2) (862,141) (22,313) (316,974) (21)
_____________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
share transactions (767,686) 2,254,311 (290,153) 2,095,476
_____________________________________________________________________________________________________________________________
Total increase (decrease) in net assets (1,352,042) 1,424,890 (262,216) 2,245,561
Net assets at beginning of year 121,583,522 120,158,632 74,080,496 71,834,935
_____________________________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income
of $(11) and $0 for IDS New York, and $695
and $(35,368) for IDS Ohio) $120,231,480 $121,583,522 $73,818,280 $74,080,496
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 43
Notes to financial statements
IDS California Tax-Exempt Trust
IDS Special Tax-Exempt Series Trust
___________________________________________________________________
1. Summary of significant accounting policies
IDS California Tax-Exempt Trust and IDS Special Tax-Exempt Series
Trust were organized as Massachusetts business trusts. IDS
California Tax-Exempt Trust includes only IDS California Tax-Exempt
Fund. IDS Special Tax-Exempt Series Trust is a "series fund" that
is currently composed of individual state tax-exempt funds and one
insured national tax-exempt fund, including IDS Massachusetts
Tax-Exempt Fund, IDS Michigan Tax-Exempt Fund, IDS Minnesota
Tax-Exempt Fund, IDS New York Tax-Exempt Fund, IDS Ohio Tax-Exempt
Fund and IDS Insured Tax-Exempt Fund (the Funds). The Funds are
non-diversified, open-end management investment companies as
defined in the Investment Company Act of 1940 (as amended).
Each Fund's goal is to provide a high level of income generally
exempt from federal income tax as well as from the respective state
and local income tax. A portion of each Fund's assets may be
invested in bonds whose interest is subject to the alternative
minimum tax computation. The Funds, excluding IDS Insured
Tax-Exempt Fund, concentrate their investments in a single state
and therefore may have more credit risk related to the economic
conditions of the respective state than Funds that have a broader
geographical diversification.
Each Fund offers Class A, Class B and Class Y shares. Class A
shares are sold with a front-end sales charge. Class B shares,
which each Fund began offering on March 20, 1995, may be subject to
a contingent deferred sales charge. Class B shares automatically
convert to Class A after eight years. Class Y shares, which each
Fund also began offering on March 20, 1995, have no sales charge
and are offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation
and other rights, and the same terms and conditions, except that
the level of distribution fee, transfer agency fee and service fee
(class specific expenses) differs among classes. Income, expenses
(other than class specific expenses) and realized and unrealized
gains or losses on investments are allocated to each class of
shares based upon its relative net assets.
Significant accounting policies followed by the Funds are
summarized below:
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from
those estimates.
<PAGE>
PAGE 44
Valuation of securities
All securities are valued at the close of each business day.
Securities for which market quotations are not readily available
are valued at fair value according to methods selected in good
faith by the board. Determination of fair value involves, among
other things, reference to market indexes, matrixes and data from
independent brokers. Short-term securities maturing in more than
60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those
maturing in 60 days or less are valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect gains and
facilitate buying and selling of securities for investment
purposes, each Fund may buy and sell put and call options and write
covered call options on portfolio securities and may write
cash-secured put options. The risk in writing a call option is
that each Fund gives up the opportunity of profit if the market
price of the security increases. The risk in writing a put option
is that each Fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying
an option is that each Fund pays a premium whether or not the
option is exercised. Each Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid
secondary market does not exist. Each Fund also may write
over-the-counter options where the completion of the obligation is
dependent upon the credit standing of the other party.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, each Fund may buy and sell interest rate futures contracts.
Risks of entering into futures contracts and related options
include the possibility that there may be an illiquid market and
that a change in the value of the contract or option may not
correlate with changes in the value of the underlying securities.
Securities purchased on a when-issued basis
Delivery and payment of securities that have been purchased by IDS
Massachusetts Tax-Exempt Fund on a forward-commitment or when
issued basis can take place one month or more after the transaction
date. During this period, such securities are subject to market
fluctuations, and they may affect the Fund's net assets the same as
owned securities. The Fund designates cash or liquid high-grade
debt securities at least equal to the amount of its commitment. As
of June 30, 1996, IDS Massachusetts Tax-Exempt Fund had entered
into outstanding when-issued or forward commitments of $965,203.<PAGE>
PAGE 45
Federal taxes
Since each Fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts and losses
deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization
for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized
gains (losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, accumulated net realize gain
(loss) and undistributed net investment income have been increased
(decreased), resulting in net reclassification adjustments to
additional paid-in-capital by the following:
<TABLE>
<CAPTION>
California Michigan Minnesota Ohio
Tax-Exempt Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund Fund
___________________________________________________________________________
<S> <C> <C> <C> <C>
Accumulated net $(938) $1,710 $ 2,171 $(208)
realized gain (loss)
Undistributed net 938 1,710 (272) 208
investment income (loss)
___________________________________________________________________________
Additional paid-in-capital $ -- $ -- $(1,899) $ --
</TABLE>
Dividends to shareholders
Dividends from net investment income, declared daily and paid
monthly, are reinvested in additional shares of each Fund at net
asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend at the end of the
calendar year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Interest income, including level-yield
amortization of premium and discount, is accrued daily.
At June 30, 1996, American Express Financial Corporation (AEFC)
owned 208 Class Y shares for IDS California, 202 for IDS
Massachusetts, 200 for IDS Michigan, 207 for IDS Minnesota, 209 for
IDS New York and 202 for IDS Ohio Tax-Exempt Funds.
<PAGE>
PAGE 46
___________________________________________________________________
2. Expenses and sales charges
Effective March 20, 1995, when each Fund began offering multiple
classes of shares, each Fund entered into agreements with AEFC for
managing its portfolio, providing administrative services and
serving as transfer agent as follows: Under its Investment
Management Services Agreement, AEFC determines which securities
will be purchased, held or sold. The management fee is a percentage
of each Fund's average daily net assets in reducing percentages
from 0.47% to 0.38% annually.
Under an Administrative Services Agreement, each Fund pays AEFC for
administration and accounting services at a percentage of each
Fund's average daily net assets in reducing percentages from 0.04%
to 0.02% annually.
Under a separate Transfer Agency Agreement, AEFC maintains
shareholder accounts and records. Each Fund pays AEFC an annual fee
per shareholder account for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
Also effective March 20, 1995, each Fund entered into agreements
with American Express Financial Advisors Inc. for distribution and
shareholder servicing-related services. Under a Plan and Agreement
of Distribution, each Fund pays a distribution fee at an annual
rate of 0.75% of the Fund's average daily net assets attributable
to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, each Fund pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of each
Fund's average daily net assets attributable to Class A and Class B
shares.
American Express Financial Corporation will assume and pay any
expenses (except taxes and brokerage commissions) that exceed the
most restrictive applicable state expense limitation.
Sales charges received by American Express Financial Advisors Inc.
for distributing the Funds' shares for the year ended June 30,
1996, are as follows:
Class A Class B
IDS California $ 722,870 $12,031
IDS Massachusetts 313,479 2,723
IDS Michigan 209,670 1,577
IDS Minnesota 1,109,339 10,709
IDS New York 265,967 5,682
IDS Ohio 177,634 1,335
During the year ended June 30, 1996, the Funds' custodian and
transfer agency fees were reduced by $100,484 for IDS California,
$7,768 for IDS Massachusetts, $23,235 for IDS Michigan, $111,580
for IDS Minnesota, $3,793 for IDS New York and $19,403 for IDS Ohio
Tax-Exempt Funds as a result of earnings credits from overnight
cash balances.<PAGE>
PAGE 47
Prior to April 30, 1996, each Fund had a retirement plan for its
independent board members. The plan was terminated April 30, 1996.
The retirement plan expense amounted to $557 for IDS California,
$1,166 for IDS Massachusetts, $1,167 for IDS Michigan, $3,037 for
IDS Minnesota, $1,156 for IDS New York and $506 for IDS Ohio
Tax-Exempt Funds for the year. The total liability for the plan is
$13,293 for IDS California, $5,584 for IDS Massachusetts, $6,584
for IDS Michigan, $11,280 for IDS Minnesota, $6,224 for IDS New
York and $5,584 for IDS Ohio Tax-Exempt Funds and will be paid out
at some future date.
___________________________________________________________________
3. Securities transactions
For the year ended June 30, 1996, cost of purchases and proceeds
from sales (other than short-term obligations) aggregated
$35,078,861 and $37,682,799 for IDS California, $8,060,747 and
$3,947,688 for IDS Massachusetts, $25,233,011 and $23,299,257 for
IDS Michigan, $55,992,006 and $54,660,000 for IDS Minnesota,
$10,765,522 and $12,297,596 for IDS New York and $17,896,136 and
$18,049,881 for IDS Ohio Tax-Exempt Funds. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Share transactions
Transactions in shares of each Fund for the periods indicated are
as follows:
California Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
_______________________________________________________________
Sold 4,511,208 995,477 --
Issued for reinvested 1,925,925 35,294 12
distributions
Redeemed (7,378,222) (184,480) --
_______________________________________________________________
Net increase
(decrease) (941,089) 846,291 12
_______________________________________________________________
<PAGE>
PAGE 48
Year ended June 30, 1995
Class A Class B* Class Y*
_______________________________________________________________
Sold 4,428,851 399,282 194
Issued for reinvested 1,929,797 2,588 2
distributions
Redeemed (9,662,241) (5,232) --
_______________________________________________________________
Net increase
(decrease) (3,303,593) 396,638 196
_______________________________________________________________
*Inception date was March 20, 1995.
Massachusetts Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
_______________________________________________________________
Sold 2,049,431 819,429 --
Issued for reinvested 529,215 27,882 10
distributions
Redeemed (2,742,630) (147,842) --
_______________________________________________________________
Net increase (decrease) (163,984) 699,469 10
_______________________________________________________________
Year ended June 30, 1995
Class A Class B* Class Y*
_______________________________________________________________
Sold 1,986,963 373,441 190
Issued for reinvested 581,883 2,245 2
distributions
Redeemed (3,369,135) (25,777) --
_______________________________________________________________
Net increase (decrease) (800,289) 349,909 192
_______________________________________________________________
*Inception date was March 20, 1995.
Michigan Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
________________________________________________________________
Sold 1,429,150 315,865 --
Issued for reinvested 725,981 15,490 13
distributions
Redeemed (1,794,375) (30,500) --
________________________________________________________________
Net increase 360,756 300,855 13
________________________________________________________________
<PAGE>
PAGE 49
Year ended June 30, 1995
Class A Class B* Class Y*
________________________________________________________________
Sold 2,295,997 183,169 185
Issued for reinvested 615,732 779 2
distributions
Redeemed (2,849,810) (615) --
________________________________________________________________
Net increase 61,919 183,333 187
________________________________________________________________
*Inception date was March 20, 1995.
Minnesota Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
_________________________________________________________________
Sold 8,270,935 2,429,988 --
Issued for reinvested 3,510,197 76,278 12
distributions
Redeemed (13,742,113) (192,219) --
_________________________________________________________________
Net increase
(decrease) (1,960,981) 2,314,047 12
_________________________________________________________________
Year ended June 30, 1995
Class A Class B* Class Y*
_________________________________________________________________
Sold 11,298,321 785,048 193
Issued for reinvested 3,679,693 4,700 2
distributions
Redeemed (16,502,683) (6,917) --
_________________________________________________________________
Net increase
(decrease) (1,524,669) 782,831 195
_________________________________________________________________
*Inception date was March 20, 1995.
<PAGE>
PAGE 50
New York Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
_________________________________________________________________
Sold 1,906,925 744,701 --
Issued for reinvested 1,006,832 30,877 12
distributions
Redeemed (3,672,303) (166,438) --
_________________________________________________________________
Net increase
(decrease) (758,546) 609,140 12
_________________________________________________________________
Year ended June 30, 1995
Class A Class B* Class Y*
_________________________________________________________________
Sold 3,164,808 371,486 195
Issued for reinvested 1,057,342 2,472 2
distributions
Redeemed (4,176,540) (4,318) --
__________________________________________________________________
Net increase 45,610 369,640 197
__________________________________________________________________
*Inception date was March 20, 1995.
Ohio Tax-Exempt Fund
Year ended June 30, 1996
Class A Class B Class Y
________________________________________________________________
Sold 1,279,987 327,095 --
Issued for reinvested 596,160 12,022 11
distributions
Redeemed (2,225,461) (59,086) --
________________________________________________________________
Net increase (decrease) (349,314) 280,031 11
________________________________________________________________
Year ended June 30, 1995
Class A Class B* Class Y*
________________________________________________________________
Sold 2,368,379 133,660 189
Issued for reinvested 604,956 691 2
distributions
Redeemed (2,726,424) (4) --
________________________________________________________________
Net increase 246,911 134,347 191
________________________________________________________________
*Inception date was March 20, 1995.
<PAGE>
PAGE 51
___________________________________________________________________
5. Interest rate futures contracts
Upon entering into a futures contract, each Fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by each Fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. Each Fund recognizes a realized gain or loss when the
contract is closed or expires.
Investments in securities at June 30, 1996, included securities
valued at $5,923,940 for IDS California, $2,158,350 for IDS
Massachusetts, $2,106,765 for IDS Michigan, $5,368,150 for IDS
Minnesota, $5,303,990 for IDS New York and $1,584,485 for IDS Ohio
Tax-Exempt Funds that were pledged as collateral to cover initial
margin deposits on 111, 30, 34, 181, 64 and 32 open purchase
contracts, respectively. The market value of the open contracts at
June 30, 1996, was $12,470,156 for IDS California, $3,370,312 for
IDS Massachusetts, $3,819,688 for IDS Michigan, $20,334,219 for IDS
Minnesota, $7,190,000 for IDS New York and $3,595,000 for IDS Ohio
Tax-Exempt Funds with a net unrealized gain of $295,250 for IDS
California, $79,187 for IDS Massachusetts, $90,655 for IDS
Michigan, $484,781 for IDS Minnesota, $169,469 for IDS New York and
$85,594 for IDS Ohio Tax-Exempt Funds.
The Funds maintain, in a segregated account with its custodian,
advanced refunded bonds with at least a market value equal to the
value of these open long futures contracts. Advanced refunded
bonds are highly liquid, usually covered by government securities,
which will be refunded at the bond's first call date.
___________________________________________________________________
6. Capital loss carryover
For federal income tax purposes, capital loss carryovers were
$182,601 for California, $426,167 for IDS Massachusetts, $216,362
for IDS Michigan, $2,911,065 for IDS Minnesota $2,695,894 for IDS
New York and $843,358 for IDS Ohio tax-exempt funds at June 30,
1996. These capital loss carryovers will expire in 1999 through
2005 if not offset by subsequent capital gains. It is unlikely the
board will authorize a distribution of any net realized capital
gains for a fund until the respective capital loss carryover has
been offset or expires.
___________________________________________________________________
7. Option contracts written
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. Each Fund will realize a gain or loss upon expiration or
closing of the option transaction. When options on debt securities
or futures are exercised, the Fund will realize a gain or loss.
When other options are exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or
the cost of a security for a purchased put or call option is
adjusted by the amount of the premium received or paid.
<PAGE>
PAGE 52
<TABLE>
<CAPTION>
The number of contracts and premium amounts associated with option contracts
written is as follows:
Year ended June 30, 1996
California Tax-Exempt Fund Massachusetts Tax Exempt Fund
___________________________________________________________________________
Calls Calls
___________________________________________________________________________
Contracts Premiums Contracts Premiums
___________________________________________________________________________
<S> <C> <C> <C> <C>
June 30, 1995 -- $ -- -- $ --
Opened 94 93,436 15 14,910
Exercised (94) (93,436) (15) (14,910)
___________________________________________________________________________
June 30, 1996 __ $ __ __ $ __
___________________________________________________________________________
Year ended June 30, 1996
Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund
___________________________________________________________________________
Calls Calls
___________________________________________________________________________
Contracts Premiums Contracts Premiums
___________________________________________________________________________
June 30, 1995 -- $ -- -- $ --
Opened 16 15,904 89 88,466
Exercised/Expired (16) (15,904) (89) (88,466)
____________________________________________________________________________
June 30, 1996 -- $ -- -- $ --
____________________________________________________________________________
Year ended June 30, 1996
New York Tax-Exempt Fund Ohio Tax-Exempt Fund
___________________________________________________________________________
Calls Calls
___________________________________________________________________________
Contracts Premiums Contracts Premiums
___________________________________________________________________________
June 30, 1995 -- $ -- -- $ --
Opened 71 70,574 16 15,904
Exercised 71 (70,574) (16) (15,904)
____________________________________________________________________________
June 30, 1996 -- $ -- -- $ --
____________________________________________________________________________
</TABLE>
<PAGE>
PAGE 53
___________________________________________________________________
8. Financial highlights
"Financial highlights" showing per share data and selected
information are presented on pages 8-19 of the prospectus.
<PAGE>
PAGE 54
<TABLE>
<CAPTION>
Investments in securities
IDS California Tax-Exempt Fund (Percentages represent value of
June 30, 1996 investments compared to net assets)
____________________________________________________________________________________________________________________________
Municipal bonds (97.7%)
____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Aliso Viejo Orange County District Community Facilities
District #88-1 Special Tax Bonds Series 1992A 7.35 % 2018 $ 3,000,000 $ 3,455,400
Anaheim Public Finance Authority Revenue Bonds
2nd Series Electric Utilities San Juan (FGIC Insured) 5.75 2022 11,100,000 10,877,889
Brea Redevelopment Agency Tax Allocation Refunding Bonds
Redevelopment Project AB (MBIA Insured) 5.50 2017 1,800,000 1,722,024
Burbank Redevelopment Agency Tax Allocation Bonds
Golden State Series 1993A 6.00 2023 2,000,000 1,942,320
Calaveras County Water District
Certificate of Participation Refunding Revenue Bonds
Water & Sewer System Improvement (AMBAC Insured) 5.25 2012 2,815,000 2,680,950
Chapman College Educational Facilities Authority Revenue Bonds
Series 1989B 7.50 2018 500,000 538,135
Chico Walker Senior Housing Insured Revenue Bonds
The Lodge Series 1993A 5.70 2023 1,500,000 1,403,550
Clearlake Redevelopment Agency Highlands Park Community Development
Tax Allocation Bonds Series 1993 6.40 2023 1,420,000 1,370,215
Eastern Municipal Water District Riverside County
Water & Sewer Revenue Certificates of Participation
Series 1991 6.00 2023 1,000,000 994,700
Eastern Municipal Water District Riverside County
Water & Sewer Pre-Refunded Revenue
Certificates of Participation Series 1991
(FGIC Insured) 6.50 2020 3,000,000 3,295,920
El Camino Hospital District Hospital Pre-Refunded Revenue
Certificate of Participation Series A 8.50 2017 1,500,000 1,610,445
Fontana Redevelopment Agency
Refunding Certificate of Participation
Police Facility Series 1993 5.625 2016 4,500,000 4,197,375
Fontana Unified School District
Unlimited Tax General Obligation Bonds
Zero Coupon CVT Series C (FGIC Insured) 6.40 1997 3,470,000 (e) 3,300,317
Foothill-De Anza Community College Santa Clara County
Refunding Certificate of Participation Series 1993
(Connie Lee Insured) 5.25 2021 1,675,000 1,500,766
Foothill/Eastern Transportation Corridor Agency Toll Road
Senior Lien Revenue Bonds Series 1995A 6.00 2034 1,775,000 1,686,534
Garden Grove Agency Community Development
Tax Allocation Refunding Bonds
Garden Grove Community 5.875 2023 3,000,000 2,779,590
Garden Grove Certificate of Participation
Bahia Village/Emerald Isle
(FSA Insured) 5.70 2023 2,660,000 2,550,222
Huntington Beach Certificate of Participation Revenue Bonds
Civic Center Refinancing (AMBAC Insured) 5.50 2016 1,715,000 1,623,213
See accompanying notes to investments in securities.
Indian Wells Improvement Bonds
Assessment District #13 7.50 2008 370,000 381,152
Irwindale Redevelopment Agency Sub Lien
Tax Allocation Bonds Series 1996 7.00 2019 1,700,000 1,738,726
Long Beach Harbor Revenue Bonds
Series 1989A A.M.T. 7.25 2019 7,000,000 (g) 7,421,960
Los Angeles Convention & Exhibition Center
Pre-Refunded Certificate of Participation
Series 1989A 7.00 2020 5,000,000 5,446,000
Los Angeles Convention & Exhibition Center
Pre-Refunded Certificate of Participation
Series 1989A 7.30 2009 1,000,000 1,097,890
Los Angeles Convention & Exhibition Center
Pre-Refunded Certificate of Participation
Series 1989A 7.375 2018 2,900,000 3,190,174
Los Angeles County Certificate of Participation
Disney Parking 5.50 2021 1,625,000 1,458,031
Los Angeles County Metropolitan Transportation Authority
Sales Tax Revenue Bonds (AMBAC Insured) 5.00 2025 1,265,000 1,104,598
<PAGE>
PAGE 55
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds Series A 7.00 2019 4,150,000 4,442,243
Los Angeles County Transportation Commission
Sales Tax Pre-Refunded Revenue Bonds Series A 8.00 2016 2,000,000 2,125,100
Los Angeles County Transportation Commission
Sales Tax Pre-Refunded Revenue Bonds
Series 1988A 7.875 2008 500,000 545,150
Los Angeles County Transportation Commission
Sales Tax Refunding Revenue Bonds
Series 1989A 7.40 2015 2,000,000 2,192,320
Los Angeles Department of Water & Power
Electric Plant Revenue Bonds Series 1990 7.125 2030 6,500,000 7,136,935
Los Angeles Department of Water & Power
Waterworks Refunding Revenue Bonds
Second Issue (Secondary FGIC Insured) 4.50 2018 3,000,000 2,455,560
Los Angeles International Airport Revenue Bonds
Series D (FGIC Insured) A.M.T. 5.50 2015 1,000,000 943,890
Los Angeles Multi-family Housing Revenue Bonds
Park Parthenia Series 1986A
(GNMA Insured) A.M.T. 7.40 2022 1,000,000 1,032,310
Los Angeles Single Family Home Mortgage Revenue Bonds
Series 1991A (GNMA & FNMA Insured) A.M.T. 6.875 2025 810,000 831,927
Los Angeles State Building Authority
Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease
Series 1988A 7.25 2006 1,500,000 1,606,860
Los Angeles State Building Authority
Lease Pre-Refunded Revenue Bonds
State Department of General Services Lease
Series 1988A 7.50 2011 1,500,000 1,612,875
Los Angeles State Harbor Revenue Bonds
Escrowed to Maturity 7.60 2018 1,000,000 1,187,930
Los Angeles Wastewater System
Pre-Refunded Revenue Bonds Series 1987 8.125 2017 1,000,000 1,075,590
Los Angeles Wastewater System
Refunding Revenue Bonds Series D (FGIC Insured) 4.70 2017 1,000,000 851,030
Modesto Certificate of Participation Pre-Refunded Bonds
Community Center 8.10 2015 1,000,000 1,075,270
Modesto Irrigation Certificate of Participation 7.25 2015 2,000,000 2,058,240
Mount Diablo Hospital District Hospital
Pre-Refunded Revenue Bonds
Series 1990A (AMBAC Insured) 7.00 2017 3,000,000 3,338,070
North City West Community School Facility Authority Special Tax
Refunding Revenue Bonds Series 1995B (CGIC Insured) 5.75 2015 1,000,000 994,170
Northern California Public Power Authority Power
Pre-Refunded Revenue Bonds Hydroelectric Series 1986B-3 8.00 2024 2,000,000 2,148,500
Northern California Public Power Authority Power
Pre-Refunded Revenue Bonds Hydroelectric #1 Series 1986B-1 8.00 2024 2,100,000 2,255,925
Northern California Transmission Agency
California-Oregon Transmission
Pre-Refunded Revenue Bonds
Series 1990A (MBIA Insured) 7.00 2024 2,000,000 2,194,520
Northern California Transmission
Select Auction Variable Rate Security &
Residual Interest Revenue Bonds Inverse Floater
(MBIA Insured) 5.50 2024 4,500,000 (f) 4,162,725
Northridge Water District Revenue Certificate of Participation
(AMBAC Insured) 5.25 2014 1,500,000 1,403,415
Novato Community Facility District #1 Vintage Oaks
Public Improvement Special Tax Refunding Bonds 7.25 2021 2,000,000 2,068,760
Pleasanton Joint Powers Financing Authority Reassessment
Revenue Bonds Series 1993A 6.15 2012 1,940,000 1,939,787
Port of Oakland Revenue Bonds
Series 1989A (BIG Insured) A.M.T. 7.60 2016 500,000 521,655
Rancho Cucamonga Redevelopment Agency
1990 Tax Allocation Pre-Refunded Bonds
(MBIA Insured) 7.125 2019 3,540,000 3,887,628
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation Eisenhower Memorial Hospital 7.00 2022 4,250,000 4,535,430
Redding Redevelopment Agency Tax Allocation Refunding Bonds
Canby Hilltop Cypress Series D (CGIC Insured) 5.00 2023 4,700,000 4,101,690
Richmond Joint Powers Financing Authority Leases and Gas Tax
Refunding Revenue Bonds Series 1995A 5.25 2013 3,540,000 3,214,957
Sacramento Cogeneration Authority Cogeneration Revenue Bonds
Procter & Gamble Series 1995 6.375 2010 1,000,000 1,011,580
Sacramento Municipal Utility District Series R 6.00 2015-17 7,500,000 7,427,775
Sacramento Municipal Utility District Pre-Refunded Series V 7.50 2018 2,775,000 2,967,474
Sacramento Municipal Utility District Pre-Refunded Series W 7.50 2018 1,980,000 2,117,333
Sacramento Municipal Utility District Pre-Refunded Series Y
(MBIA Insured) 6.75 2019 3,400,000 3,781,684
<PAGE>
PAGE 56
Sacramento Power Authority Cogeneration Revenue Bonds Series 1995 6.00 2022 1,000,000 954,500
San Bernardino County Medical Center
Financing Project Certificate of Participation
Series 1996 (MBIA Insured) 5.00 2028 2,500,000 2,180,750
San Diego County Capital Asset Lease Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured) 7.27 2007 3,200,000 (f) 3,228,000
San Diego Industrial Development Revenue Bonds
San Diego Gas & Electric Series A 7.625 2021 1,000,000 1,021,170
San Diego Regional Transportation Commission Sales Tax
Pre-Refunded Revenue Bonds Limited Tax Series 1989A 6.25 2008 5,030,000 5,271,490
San Joaquin County Pre-Refunded Certificate of Participation
Human Services Facility Series 1989 (BIG Insured) 6.70 2009 3,500,000 3,784,025
San Joaquin County Certificate of Participation
Jail & Sheriffs Operation Center (MBIA Insured) 6.75 2015 2,000,000 2,179,880
San Jose Redevelopment Agency Merged Area Redevelopment
Tax Allocation Bonds Series 1993 (MBIA Insured) 4.75 2024 1,435,000 1,206,390
San Jose Redevelopment Agency Merged Area Tax Allocation Bonds
Series 1993 Inverse Floater (MBIA Insured) 7.08 2014 3,000,000 (f) 2,617,500
San Mateo County Transit District Limited Tax Pre-Refunded Bonds
Series 1990A (MBIA Insured) 6.50 2020 1,500,000 1,592,235
Santa Clara County Mountain View-
Los Altos Union High School District Unlimited Tax
General Obligation Bonds Series A 5.75 2015 1,200,000 1,182,168
Santa Cruz Certificate of Participation 8.375 2007 1,220,000 1,287,320
Southern California Home Financing Authority
Single Family Mortgage Revenue Bonds 1990B
(GNMA Insured) A.M.T. 7.75 2024 575,000 607,907
Southern California Public Power Authority Transmission
Special Bonds 6.00 2012 2,700,000 2,694,492
South Tahoe Joint Powers Financing Authority
Refunding Revenue Bonds Series 1995B 6.25 2020 2,700,000 2,624,238
State Department Water Resources Water System
Pre-Refunded Revenue Bonds Central Valley
Series D 7.70 2024 2,400,000 2,565,096
State Department Water Resource Water System Revenue Bonds
Central Valley Project Series L 5.50 2023 3,000,000 2,803,080
State Education Facility Authority Revenue Bonds
Pomona College 6.00 2017 3,000,000 2,992,710
State Health Facility Finance Authority Pre-Refunded Revenue Bonds
St. Joseph Health System Series 1989A 6.90 2014 3,500,000 (g) 3,803,380
State Health Facility Finance Authority Revenue Bonds
Sisters Providence 5.50 2016 1,045,000 1,003,012
State Housing Finance Agency Home Mortgage Revenue Bonds
Series 1986B 6.90 2016 1,990,000 2,032,487
State Pollution Control Finance Authority Pollution Control
Revenue Bonds Southern California Edison
Series 1988A A.M.T. 6.90 2006 2,000,000 2,151,340
State Public Works Board Lease Revenue Bonds
California Community Colleges Series 1994B 7.00 2019 2,000,000 2,192,140
State Public Works Board Lease Revenue Bonds
Department of Corrections
Substance Abuse Treatment Facility & State Prison at Corcoran
Series 1996A (AMBAC Insured) 5.25 2021 1,870,000 1,722,588
State Public Works Board University of California Lease
Pre-Refunded Revenue Bonds Series 1990A 7.00 2015 2,250,000 2,492,752
State University Revenue Bonds San Jose State University
Student Union Series B 7.60 2007 150,000 156,477
State Unlimited Tax General Obligation Bonds
(Secondary FGIC Insured) 4.75 2023 2,945,000 2,454,304
Statewide Community Development Authority
Certificate of Participation Sutter Health Group
(MBIA Insured) 5.50 2022 1,000,000 952,070
Statewide Community Development Authority
Health Facilities Revenue Bonds
Unihealth America Series 1993A
Inverse Floater (AMBAC Insured) 7.32 2011 5,000,000 (f) 4,825,000
Statewide Community Development Authority
Health Facilities Revenue Bonds
Certificate of Participation
San Gabriel Valley Medical Center
Series 1996A 5.50 2014 1,000,000 941,870
Statewide Community Development Authority Revenue
Certificate of Participation St. Joseph Health System Group 6.50 2015 5,500,000 5,692,115
Stockton Single Family Mortgage Revenue Bonds
Series 1990A (GNMA Insured) A.M.T. 7.50 2023 110,000 113,728
University of Southern California Educational Facilities Authority
Pre-Refunded Revenue Bonds Series 1989B 6.75 2015 5,000,000 5,321,350
Upland Certificate of Participation Water System Refunding Bonds
(FGIC Insured) 6.60 2016 1,000,000 1,065,230
<PAGE>
PAGE 57
Vacaville Limited Obligation Improvement Bonds
Water Rights Assessment District 8.00 2007 765,000 789,021
Vista Community Development Tax Allocation Revenue Bonds
(MBIA Insured) 5.25 2015 2,000,000 1,864,780
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $219,312,804) $234,980,999
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $219,312,804)(h) $234,980,999
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 58
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
<TABLE><CAPTION>
(Unaudited)
Rating 6-30-96 6-30-95
_____________________________________________________________________________
<S> <C> <C>
AAA 59% 61%
AA 19 16
A 13 19
BBB 7 3
BB and below 2 1
Non-rated -- --
_____________________________________________________________________________
Total 100% 100%
____________________________________________________________________________
</TABLE>
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of June 30, 1996, the value
of securities subject to alternative minimum tax represented 5.8%
of net assets.
(e) For these zero coupon bonds, which become coupon paying at a
future date, the interest rate disclosed Represents the annualized
effective yield from the date of acquisition to interest reset date
disclosed.
(f) Inverse floaters represent securities that pay interest at a
rate that increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in market short-term rates.
Interest rate disclosed is the rate in effect on June 30, 1996.
Inverse floaters in the aggregate represent 4.5% of the Fund's
net assets as of June 30, 1996.
(g) Partially pledged as initial deposit on the following open
interest rate futures contracts (see Note 5 to the financial
statements):
Type of security Notional amount
Purchase contracts
____________________________________________________________
Municipal Bonds Index Sept. 1996 $11,100,000
____________________________________________________________
<PAGE>
PAGE 59
(h) At June 30, 1996, the cost of securities for federal income tax
purposes was $219,142,112 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $17,111,872
Unrealized depreciation (1,272,985)
________________________________________________________________
Net unrealized appreciation $15,838,887
________________________________________________________________
<PAGE>
PAGE 60
<TABLE>
<CAPTION>
Investments in securities
IDS Massachusetts Tax-Exempt Fund (Percentages represent value of
June 30, 1996 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (98.0%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Bay Transit Authority Series A (Secondary CGIC Insured) 5.50 % 2021 $ 500,000 $ 477,880
Bay Transportation Authority General Transportation System
Refunding Bonds Series 1992B 6.20 2016 1,500,000 1,575,135
Boston City Hospital Refunding Revenue Bonds
Series B (FHA Insured) 5.75 2023 3,000,000 2,885,250
Boston City Hospital Pre-Refunded Revenue Bonds
Series A (FHA Insured) 7.625 2021 1,000,000 1,133,940
Boston General Obligation Bonds
Series 1991A (MBIA Insured) 6.75 2011 500,000 552,720
Boston General Obligation Refunding Bonds
Series 1993A (AMBAC Insured) 5.65 2009 1,500,000 (e) 1,515,150
Boston Industrial Development Financing Authority Revenue Bonds
Massachusetts College of Pharmacy
Series 1993A (Connie Lee Insured) 5.25 2026 1,000,000 874,500
Boston Water & Sewer Commission
General Pre-Refunded Revenue Bonds
Senior Series 1991A (FGIC Insured) 7.00 2018 1,000,000 1,122,050
Boston Water & Sewer Commission
General Subordinate Revenue Bonds Series A
(MBIA Insured) 6.00 2008 500,000 506,475
Boston Water & Sewer Commission
Senior Revenue Bonds Series A 7.875 2013 365,000 376,972
Boston Water & Sewer Commission
Senior Pre-Refunded Revenue Bonds Series A 7.875 2013 210,000 217,052
Commonwealth General Obligation Consolidated Loan
Pre-Refunded Bonds
Series 1990A (FGIC Insured) 7.25 2009 500,000 552,750
Greater Lawrence Sanitary District North Andover
General Obligation Bonds 8.50 2005 510,000 534,618
Health & Educational Facilities Authority Refunding Revenue Bonds
Beth Israel Hospital Series 1989E 7.00 2009-14 550,000 582,559
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series A (MBIA Insured) 7.50 2008 500,000 544,255
Health & Educational Facilities Authority Revenue Bonds
Berkshire Health Systems Series C 5.90 2011 1,000,000 930,930
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Beverly Hospital Series D (MBIA Insured) 7.30 2019 400,000 438,776
Health & Educational Facilities Authority Revenue Bonds
Boston College Series J (FGIC Insured) 6.625 2021 2,000,000 2,103,300
Health & Educational Facilities Authority Revenue Bonds
Boston College Series K 5.25 2023 1,000,000 897,950
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series C 6.75 2021 500,000 523,520
Health & Educational Facilities Authority Revenue Bonds
Brigham & Women's Hospital Series 1991D 6.75 2024 1,000,000 1,038,340
See accompanying notes to investments in securities.
Health & Educational Facilities Authority Revenue Bonds
Cape Cod Health System Series A (Connie Lee Insured) 5.25 2021 2,500,000 2,269,100
Health & Educational Facilities Authority Revenue Bonds
Charlton Memorial Hospital Series 1991B 7.25 2013 1,750,000 1,851,133
Health & Educational Facilities Authority Revenue Bonds
Cooley Dickinson Hospital Issue (AMBAC Insured) 5.50 2025 1,250,000 1,178,863
Health & Educational Facilities Authority Revenue Bonds
Holyoke Hospital Series B 6.50 2015 500,000 472,935
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Lahey Clinic Medical Center Series A (MBIA Insured) 7.625 2018 500,000 542,560
Health & Educational Facilities Authority Revenue Bonds
Lahey Clinic Medical Center Series B (MBIA Insured) 5.625 2015 1,500,000 1,448,250
Health & Educational Facilities Authority Revenue Bonds
Melrose-Wakefield Hospital Series 1992B 6.375 2016 1,000,000 1,003,410
Health & Educational Facilities Authority Revenue Bonds
Morton Hospital & Medical Center
Series B (Connie Lee Insured) 5.25 2014 1,000,000 922,240
<PAGE>
PAGE 61
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Mount Auburn Hospital Series A (MBIA Insured) 7.875 2018 205,000 223,427
Health & Educational Facilities Authority Revenue Bonds
New England Deaconess Hospital Series 1992D 6.625 2012 1,000,000 1,034,440
Health & Educational Facilities Authority Revenue Bonds
Newton Wellesley Hospital Series 1991D (MBIA Insured) 7.00 2015 1,000,000 1,080,130
Health & Educational Facilities Authority
Pre-Refunded Revenue Bonds Northeastern University
Series 1989C (AMBAC Insured) 7.10 2006 1,000,000 1,083,120
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Northeastern University Series E (MBIA Insured) 6.55 2022 1,000,000 1,060,660
Health & Educational Facilities Authority Revenue Bonds
North Adams Regional Hospital Series 1 6.625 2018 1,000,000 (f) 973,500
Health & Educational Facilities Authority Revenue Bonds
South Shore Hospital Series 1992D (MBIA Insured) 6.50 2022 1,000,000 1,043,680
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Stonehill College Series 1990D (AMBAC Insured) 7.70 2020 1,000,000 1,126,840
Health & Educational Facilities Authority Revenue Bonds
Suffolk University Series B (Connie Lee Insured) 6.35 2022 2,495,000 2,538,787
Health & Educational Facilities Authority Pre-Refunded Revenue Bonds
Wentworth Institute of Technology
Series A (AMBAC Insured) 7.40 2010 750,000 833,962
Health & Educational Facilities Authority Revenue Bonds
Valley Regional Health System
Series C (Connie Lee Insured) 5.75 2018 1,000,000 969,670
Health & Educational Facilities Authority Revenue Bonds
Wentworth Institute of Technology
Series B (Connie Lee Insured) 5.50 2023 1,500,000 1,380,420
Industrial Finance Agency Pollution Control Refunding Revenue Bonds
Eastern Edison Series 1993 5.875 2008 2,000,000 1,928,180
Industrial Finance Agency Resource Recovery Revenue Bonds
Ogden Haverhill Series 1986A (AMBAC Insured) A.M.T. 7.375 2011 175,000 180,719
Industrial Finance Agency Resource Recovery Revenue Bonds
SEMASS Series 1991A 9.00 2015 1,500,000 (e) 1,653,300
Industrial Finance Agency Revenue Bonds Museum of Science
Series 1989 (FSA Insured) 7.30 2009 1,000,000 1,103,460
Leominster General Obligation Bonds (MBIA Insured) 7.50 2009 1,000,000 1,115,070
Mansfield General Obligation Bonds (AMBAC Insured) 6.70 2011 1,000,000 1,072,960
Municipal Wholesale Electric Power Supply System
Pre-Refunded Revenue Bonds Series 1992B 6.75 2017 1,395,000 1,554,951
Municipal Wholesale Electric Power Supply System
Refunding Revenue Bonds Series B (MBIA Insured) 4.75 2011 1,750,000 1,541,855
Municipal Wholesale Electric Power Supply System Revenue Bonds
Special Pars & Inflows (AMBAC Insured) 5.45 2018 1,600,000 1,476,784
Nantucket General Obligation Bonds 6.80 2011 1,000,000 1,085,420
New Bedford General Obligation Bonds
Series 1995 (AMBAC Insured) 5.50 2015 700,000 669,480
North Andover General Obligation Bonds (MBIA Insured) 7.35 2008 310,000 345,647
Port Authority Revenue Bonds Series 1990A
(FGIC Insured) A.M.T. 7.50 2020 1,000,000 1,089,040
Quincy Refunding Revenue Bonds Quincy Hospital
Series 1993 (FSA Insured) 5.25 2016 1,000,000 925,150
Southeastern University Building Refunding Revenue Bonds
Series A (AMBAC Insured) 5.75 2016 1,250,000 1,244,038
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.55 2010 1,000,000 1,117,840
State Education Loan Authority, Educational Loan Revenue Bonds
Issue E Series B (AMBAC Insured) A.M.T. 6.00 2012 1,000,000 1,003,720
State General Obligation Consolidated Loan Bonds
Series 1991A (FGIC Insured) 6.00 2011 1,095,000 1,112,629
State Housing Finance Agency Single Family Housing Revenue Bonds
Series 13 A.M.T. 7.95 2023 485,000 510,564
State Housing Finance Authority Residential Development Bonds
Series 1992A (FNMA Insured) 6.875 2011 1,000,000 1,053,580
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds Series 4 7.375 2014 430,000 443,442
State Housing Finance Authority Single Family Mortgage Housing
Revenue Bonds Series 7 A.M.T. 8.10 2020 245,000 255,535
State Water Resource Authority Revenue Bonds Series A
(Secondary MBIA Insured) 5.50 2022 1,100,000 1,034,836
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.40 2007 125,000 133,088
University of Lowell Building Authority Facilities Revenue Bonds
4th Series A 7.60 2012 50,000 53,364
University of Massachusetts Building Authority Revenue Bonds
Series A (FSA Insured) 7.50 2014 500,000 539,065
University of Massachusetts Building Authority Revenue Bonds
Series A Escrowed to Maturity 7.50 2011 120,000 132,026
Water Resource Authority General Pre-Refunded Revenue Bonds
Series 1990A 7.625 2014 500,000 559,850
<PAGE>
PAGE 62
Water Resource Authority General Pre-Refunded Revenue Bonds
Series 1991A 6.50 2019 1,000,000 1,099,800
Water Resource Authority General Revenue Bonds
Series 1993B (MBIA Insured) 5.00 2022 1,365,000 1,196,941
Water Resource Authority General Revenue Bonds
Series 1993C 5.25 2020 1,400,000 1,261,274
Worcester General Obligation Refunding Bonds
Series 1995G (MBIA Insured) 5.30 2015 1,000,000 942,860
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $68,678,578) $71,857,717
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term security (0.3%)
_____________________________________________________________________________________________________________________________
Issuer (d,g) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal note
State General Obligation V.R.D.B. Series E
12-01-97 3.60% $ 200,000 $ 200,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $200,000) 200,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $68,878,578)(h) $72,057,717
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 63
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
<TABLE><CAPTION>
(Unaudited)
Rating 06-30-96 06-30-95
_______________________________________________________________________________________________________
<S> <C> <C>
AAA 66% 65%
AA 9 11
A 16 17
BBB 7 5
BB and below 2 2
Non-rated -- --
_______________________________________________________________________________________________________
Total 100% 100%
_______________________________________________________________________________________________________
</TABLE>
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax - As of June 30, 1996, the value
of securities subject to alternative minimum tax represented 4.1%
of net assets. V.R.D.B. -- Variable Rate Demand Bond
(e) Partially pledged as initial deposit on the following open
interest rate futures contracts (see Note 5 to the financial
statements):
Type of security Notinal amount
Purchase contracts
________________________________________________________
Municipal Bonds September 1996 $3,000,000
________________________________________________________
(f) At June 30, 1996, the cost of securities purchased on a
when-issued basis was $965,203.
(g) Interest rate varies to reflect current market conditions; rate
shown is the effective rate on June 30, 1996.
(h) At June 30, 1996, the cost of securities for federal income tax
purposes was $68,879,596 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $3,831,024
Unrealized depreciation (652,903)
________________________________________________________
Net unrealized appreciation $3,178,121
________________________________________________________
<PAGE>
PAGE 64
<TABLE>
<CAPTION>
Investments in securities
IDS Michigan Tax-Exempt Fund (Percentages represent value of
June 30, 1996 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (96.8%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Auburn Hills Limited Tax General Obligation
Street Improvement Bonds 6.00 % 2004 $ 200,000 $ 206,898
Battle Creek Calhoun County
Downtown Development Authority Bonds Series 1994 7.65 2022 1,250,000 1,374,913
Battle Creek Water Supply System
Pre-Refunded Revenue Bonds Series 1990B 6.375 2008-10 1,640,000 1,740,171
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1991 7.20 2016 1,500,000 (f) 1,673,460
Chelsea General Obligation Bonds (MBIA Insured) 8.20 2006 145,000 156,880
Chippewa Valley School Macomb County
Qualified School Building Loan Fund Unlimited Tax
General Obligation Bonds (FGIC Insured) 5.00 2021 1,000,000 885,730
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.00 2016 400,000 422,200
Comstock Park Public School Kent County Unlimited Tax
General Obligation Pre-Refunded Bonds Series 1989 6.875 2010 260,000 280,426
Detroit General Obligation Pre-Refunded Bonds
Distributable State Aid Series 1989 (AMBAC Insured) 7.20 2009 1,000,000 1,089,650
Detroit Sewer Disposal Pre-Refunded Revenue Bonds 8.00 2008 500,000 530,140
Detroit Sewer Disposal Revenue Bonds
(FGIC Insured) 5.70 2023 2,000,000 1,887,180
Detroit Unlimited Tax General Obligation Bonds Series A 7.25 2009 1,000,000 1,086,550
Detroit Unlimited Tax General Obligation Bonds Series A 8.625 2007 100,000 105,507
Detroit Unlimited Tax General Obligation Bonds Series 1988A 7.875 2008 700,000 754,740
Detroit Unlimited Tax General Obligation Bonds Series 1995A 6.80 2015 1,000,000 1,055,520
Detroit Downtown Development Authority Development Area
Number 1 Project Tax Increment Series 1996D
(Junior Lien) 6.50 2025 1,000,000 999,990
Detroit Water Supply System Revenue Second Lien
Bonds Series 1995A (MBIA Insured) 5.50 2025 1,500,000 1,413,165
Detroit Water Supply System Pre-Refunded Revenue Bonds
Series 1988 (MBIA Insured) 7.875 2008 400,000 435,468
Detroit Water Supply System Refunding Revenue Bonds
Series 1993 (FGIC Insured) 5.00 2023 1,000,000 875,520
Dexter Community Schools Building Site &
Refunding Unlimited Tax General Obligation Bonds 5.00 2017 1,500,000 1,335,870
East Lansing School District School Building & Site
Unlimited Tax General Obligation Bonds Series 1991 6.625 2014 1,000,000 1,093,370
Eaton County Water System Limited Tax General
Obligation Bonds (MBIA Insured) 5.00 2013 2,200,000 2,007,808
Farmington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A (MBIA Insured) 6.50 2022 1,500,000 (f) 1,548,945
Ferris State University Board of Trustees
General Revenue & Refunding Bonds
Series 1995 (MBIA Insured) 5.25 2020 1,000,000 917,820
Forest Hills School District Unlimited Tax
General Obligation Pre-Refunded Bonds 7.375 2015 1,000,000 1,099,080
Frenchtown Resort Drainage District Monroe County Drain
Pre-Refunded Revenue Bonds Series 1987 7.50 2011-12 615,000 672,410
See accompanying notes to investments in securities.<PAGE>
PAGE 65
Garden City School District Authority
Pre-Refunded Revenue Bonds 7.80 2010 305,000 332,404
Grand Ledge Public Schools Unlimited Tax General Obligation
Refunding Bonds Counties of Eaton, Clinton & Ionia
Series 1995 (MBIA Insured) 5.375 2024 2,000,000 1,859,700
Grand Rapids Tax Increment Revenue Bonds
Series 1994 (MBIA Insured) 6.875 2024 380,000 413,254
Grand Rapids Water Supply System Improvement
Pre-Refunded Revenue Bonds Series 1988 7.875 2018 700,000 753,074
Grand Rapids Water Supply System Improvement
Pre-Refunded Revenue Bonds Series 1990 (FGIC Insured) 7.25 2020 1,250,000 1,374,938
Hemlock Public School District Unlimited Tax General Obligation
Refunding Revenue Bonds Counties of Saginaw & Midland
Series 1996 (MBIA Insured) 5.25 2021 1,000,000 916,950
Inkster School District Unlimited Tax General Obligation
Pre-Refunded Bonds (AMBAC Insured) 7.00 2018 450,000 491,436
Isoco County Water Supply System Limited Tax
General Obligation Bonds (AMBAC Insured) 5.50 2008-10 575,000 572,368
Johannesburg-Lewiston Area Schools Building & Site
Unlimited Tax General Obligation Bonds
(AMBAC Insured) 5.00 2016 2,415,000 2,180,938
Kent County Hospital Pre-Refunded Revenue Bonds
Butterworth Hospital Series 1989A 7.25 2013 500,000 542,665
Kent County Refuse Disposal System Limited Tax
General Obligation Refunding Bonds Series 1987 8.40 2010 150,000 160,337
Lake Orion School District General Obligation Bonds
(AMBAC Insured) 5.50 2020 1,000,000 953,980
Lincoln Park School Distict Wayne County School Building & Site
Unlimited Tax General Obligation Bonds (FGIC Insured) 5.90 2026 1,000,000 1,002,440
Marquette Hospital Finance Authority Refunding Revenue Bonds
Marquette General Hospital Series 1989C 7.50 2007-19 825,000 903,721
Mason Public Schools Unlimited Tax General Obligation Bonds
County of Ingham School Building & Site Bonds
Series 1995 (FGIC Insured) 5.40 2021 1,760,000 1,648,046
Monroe County Pollution Control Revenue Bonds Detroit Edison
Fermi Plants Series 1990I (FGIC Insured) A.M.T. 7.65 2020 1,000,000 1,100,580
Monroe County Pollution Control Revenue Bonds Detroit Edison
Fermi 2 Plants Series CC (AMBAC Insured) A.M.T. 7.50 2019 1,750,000 1,924,545
Muskegon Hospital Finance Authority Refunding Revenue Bonds
Hackley Hospital Series 1988A 8.00 2008 400,000 423,924
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B 7.00 2008 1,500,000 1,662,030
Ovid-Elsie School District Unlimited Tax
General Obligation Bonds (Secondary MBIA Insured) 5.60 2021 1,000,000 966,110
Redford General Obligation Bonds (MBIA Insured) 5.25 2016 1,450,000 1,351,951
Richmond Limited Obligation Refunding Revenue Bonds
K mart Series A 6.625 2007 530,000 492,508
Rochester Hill Unlimited Tax General Obligation Bonds
Series 1990A 6.00 2009-10 735,000 752,188
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-Refunded Revenue Bonds 7.375 2019 1,000,000 1,099,080
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds (FGIC Insured) 5.75 2022 2,500,000 2,466,675
St. Louis Public Schools Unlimited Tax
General Obligation Refunding Revenue Bonds
Counties of Gratiot, Midland & Isabella Series 1995 5.25 2024 755,000 689,194
Sandusky County School District General Obligation
Refunding Bonds (AMBAC Insured) 5.25 2021 500,000 459,085
South Lake District Unlimited Tax General Obligation Bonds 6.80 2010 355,000 389,392
State Building Authority Refunding Revenue Bonds Series 1991I 6.25 2020 2,200,000 2,216,302
State Hospital Finance Authority Revenue Bonds
Central Michigan Community Hospital 6.25 2027 1,000,000 940,770
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 310,000 339,233
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds
McLaren Obligated Group Series 1991A 7.50 2021 1,750,000 1,993,687
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series A 6.25 2013 1,200,000 1,213,188
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988A 8.125 2012 90,000 97,039
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988B 8.00 2008 500,000 545,890
State Hospital Finance Authority Hospital Refunding Revenue Bonds
Sinai Hospital of Greater Detroit Series 1995 6.70 2026 1,000,000 972,470
State Hospital Finance Authority Pre-Refunded Revenue Bonds
Oakwood Hospital Group Series 1990A (FGIC Insured) 7.10 2018 1,000,000 1,102,970
State Hospital Finance Authority Revenue Bonds
Henry Ford Hospital Series 1990A 7.00 2010 1,000,000 1,097,810
<PAGE>
PAGE 66
State Hospital Finance Authority Revenue Bonds
Presbyterian Villages of Michigan Obligated Group
Series 1995 6.50 2025 1,000,000 946,250
State Public Power Agency Belle River
Refunding Revenue Bonds Series A 5.25 2018 1,000,000 908,920
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1990BB (MBIA Insured) 7.00 2008 1,000,000 1,145,110
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Detroit Edison Series 1992BB (FGIC Insured) 6.50 2016 1,500,000 1,574,400
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Escrowed to Maturity Oxford Institute 7.875 2005 150,000 170,157
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds
Ford Motor Series 1991A 7.10 2006 1,650,000 1,857,075
State Strategic Fund Limited Tax Obligation Revenue Bonds
Great Lakes Pulp & Fibre A.M.T. 10.25 2016 1,000,000 873,420
State Trunk Line Bonds Series A (FGIC Insured) 5.75 2020 1,065,000 1,051,176
State University Revenue Bonds Series A 5.50 2022 560,000 516,331
Taylor Tax Increment Finance Authority Bonds
Series 1989A (MBIA Insured) 6.00 2007-09 1,205,000 1,233,741
Troy City Downtown Development Authority County of Oakland
Development Bonds Series 1995A (Asset Guaranty) 6.375 2018 1,500,000 1,513,695
Van Buren Township Tax Increment Revenue Bonds
Series 1994 8.40 2016 1,000,000 1,107,830
Waterford School District Unlimited Tax General Obligation Bonds
Series Q 6.25 2013 340,000 352,107
Wayne County Airport Revenue Bonds Detroit Metropolitan Airport
Series 1986 (FGIC Insured) A.M.T. 8.00 2014 250,000 258,843
Wayne County Airport Revenue Bonds Detroit Metropolitan Airport
Series 1990A (AMBAC Insured) A.M.T. 7.00 2020 1,080,000 1,157,155
Wyandotte Electric Pre-Refunded Revenue Bonds
Series 1987 (AMBAC Insured) 7.875 2017 300,000 320,532
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $74,401,580) $79,039,025
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (1.7%)
_____________________________________________________________________________________________________________________________
Issuer (d,e) Effective Amount Value(a)
yield payable
at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal notes
State Strategic Fund Consumer Power Company
Series 1988A V.R.
04-15-18 3.55% $600,000 $600,000
State University Medical Service Plan
Series 1995A V.R.
12-01-27 3.55 800,000 800,000
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $1,400,000) $1,400,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $75,801,580)(g) $80,439,025
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 67
_____________________________________________________________________________________________________________________________
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Investments in bonds, by rating category as a percentage of total bonds, are as follows:
(Unaudited)
Rating 6-30-96 06-30-95
______________________________________________________________________________________________________
AAA 71% 65%
AA 12 17
A 6 10
BBB 9 6
BB and below 2 2
Non-rated -- --
______________________________________________________________________________________________________
Total 100% 100%
______________________________________________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions to identify the insurer
of the issue:
AMBAC -- American Municipal Bond Association Corporation
FGIC -- Financial Guarantee Insurance Corporation
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviations are used in portfolio descriptions:
V.R. -- Variable Rate
A.M.T. -- Alternative Minimum Tax - As of June 30, 1996, the value of
securities subject to alternative minimum tax represented
6.5% of net assets.
(e) Interest rate varies to reflect current market conditions; rate shown is the effective rate
on June 30, 1996.
(f) Partially or fully pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional amount
Purchase contracts
__________________________________________________________________________
Municipal Bonds Index Sept. 1996 $3,400,000
__________________________________________________________________________
(g) At June 30, 1996, the cost of securities for federal income tax purposes was
$75,754,513 and the aggregate gross unrealized appreciation and depreciation based on
that cost was:
Unrealized appreciation $5,284,286
Unrealized depreciation (599,744)
__________________________________________________________________________
Net unrealized appreciation $4,684,512
__________________________________________________________________________
</TABLE>
<PAGE>
PAGE 68
<TABLE>
<CAPTION>
Investments in securities (Percentages represent
IDS Minnesota Tax-Exempt Fund value of investments
June 30, 1996 compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.9%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Anoka County General Obligation Capital Improvement
Revenue Bonds Series 1989B 7.00 % 2007-10 $ 7,950,000 $ 8,371,032
Anoka County Resource Recovery Revenue Bonds
Northern States Power Series 1985 7.15 2008 3,750,000 4,004,062
Appleton Correctional Facility Revenue Bonds
Series 1990A 9.875 2020 4,000,000 (e) 2,520,000
Becker Pollution Control Revenue Bonds
Northern States Power Sherburne County
Generating Station Units 1 & 2 Series 1987A 7.25 2005 2,000,000 2,024,760
Becker Solid Waste Disposal Facility
Revenue Bonds Liberty Paper Series 1994B A.M.T. 9.00 2015 3,825,000 3,897,598
Bemidji Hospital Facilities 1st Mortgage Revenue Bonds
North Country Health Services Series 1991 7.00 2021 1,755,000 1,959,949
Bloomington Community Development
Refunding Revenue Bonds Note 24th Avenue Motel 8.50 2005 1,794,725 1,812,672
Braham Independent School District #314
Refunding Revenue Bonds 5.20 2019 3,340,000 3,121,096
Brooklyn Center Tax Credit Investor Revenue Bonds
Four Courts Apartment Project Series 1995B A.M.T. 7.58 2009 2,450,000 2,453,699
Burnsville Multi-family Housing
Refunding Revenue Bonds
FHA-Summit Park Apartments Series 1993 6.00 2033 4,000,000 3,890,040
Chaska Advance Refunded Certificate of Participation
Lease Purchase Agreement Bonds Series 1986C 7.25 2001 800,000 804,320
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place Series 1991 10.00 2032 560,000 595,353
Columbia Heights Multi-family Housing Revenue Bonds
Crestview Lutheran Home Royce Place
Series 1991 (FHA Insured) 7.75 2032 2,735,000 2,851,347
Duluth Economic Development Authority
Health Care Facility Pre-Refunded Revenue Bonds
Benedictine Health System
St. Mary's Medical Center Series 1990 8.375 2020 2,000,000 2,279,200
Duluth Hospital Facilities St. Lukes Hospital
Pre-Refunded Revenue Bonds Series 1988 9.00 2018 2,500,000 2,758,300
Duluth Housing and Redevelopment Authority 1st Mortgage
Revenue Bonds Lakeshore Lutheran Home 8.25 2009 125,000 125,191
Duluth Recreation Revenue Certificate of Participation 9.00 2004-07 1,180,000 1,223,200
Eden Prairie Housing Development Refunding Revenue Bonds
Eden Commons Series 1990 (FHA Insured) 8.25 2025 6,265,000 6,371,129
Edina Hospital System Revenue Bonds
Fairview Hospital & Health Care Services
Series 1989A 7.125 2019 2,500,000 2,669,500
Edina Multi-family Housing Revenue Bonds
Walker Assisted Living Series 1991 9.00 2031 6,700,000 7,311,978
See accompanying notes to investments in securities.
<PAGE>
PAGE 69
Faribault Rice & Goodhue County
Independent School District #656
General Obligation School Building Bonds
Series 1995 (CGIC Insured) 5.75 2015 6,900,000 6,875,988
Faribault Single Family Mortgage
Refunding Revenue Bonds Series 1991A 7.50 2011 2,165,000 2,254,220
Fergus Falls Health Care Facilities Revenue Bonds
LRHC Long-Term Care Facility Series 1995 6.50 2025 1,500,000 1,471,950
Hennepin County Lease
Revenue Certificate of Participation
Series 1991 6.80 2017 7,250,000 7,819,488
Hennepin County Solid Waste Resource Recovery
General Obligation Revenue Bonds
Series 1987A A.M.T. 8.20 2009 1,760,000 1,780,416
Hopkins Revenue Bonds Blake School 6.70 2024 3,120,000 3,384,919
Hubbard County Solid Waste Disposal Revenue Bonds
Potlatch Series 1989 A.M.T. 7.375 2013 5,610,000 5,993,163
International Falls Solid Waste Disposal
Revenue Bonds Boise Cascade
Series 1990 A.M.T. 7.75 2015 4,000,000 4,159,160
Little Canada Multi-family Housing Revenue Bonds
Provinces of Little Canada
Series 1996 A.M.T. 7.00 2027 3,885,000 3,733,174
Long Prairie/Grey Eagle Unlimited Tax
General Obligation School Bonds 5.00 2017 3,500,000 3,207,715
Mahtomedi Multi-family Housing
Briarcliff Revenue Bonds 7.35 2036 2,300,000 2,314,306
Maplewood Care Institute Series 1994 7.75 2024 3,830,000 3,854,512
Maplewood Multi-family Housing
Revenue Bonds Maplewood (FHA Insured) A.M.T. 7.75 2021 2,090,000 2,104,860
Maplewood Multi-family Housing
Carefree Cottages of Maplewood III
Refunding Revenue Bonds Series 1995 A.M.T. 7.20 2032 2,900,000 2,834,286
Minneapolis & St. Paul Housing Board
Multi-family Mortgage Revenue Bonds
GNMA Collateral Mortgage Revenue Loan
Riverside Plaza Series 1988 A.M.T. 8.25 2030 3,945,000 4,150,337
Minneapolis Community Development Agency
Limited Tax Supported Development
Revenue Common Bond Fund
Series 1996-01 6.00 2011 980,000 954,540
Minneapolis Community Development Agency &
St. Paul Housing & Redevelopment Authority
Home Ownership Mortgage Revenue Bonds
Family Housing Mortgage Phase II 7.875 2017 1,515,000 1,545,815
Minneapolis General Obligation Refunding Bonds
Sports Arena Series 1996 5.125 2020 5,000,000 4,624,200
Minneapolis General Obligation Bonds
Sports Arena Series 1996 5.20 2024 1,940,000 1,799,292
Minneapolis Hospital Facility
Pre-Refunded Revenue Bonds
Lifespan Incorporated Series 1987A 8.125 2017 3,630,000 3,819,595
Minneapolis Hospital Facility
Pre-Refunded Revenue Bonds
Lifespan Incorporated Series 1989A 7.00 2014 5,000,000 5,463,250
Minneapolis & St. Paul Housing &
Redevelopment Authority
Health Care System Revenue Bonds
Healthspan Series 1993 (AMBAC Insured) 4.75 2018 13,500,000 11,450,295
Minneapolis & St. Paul Housing &
Redevelopment Authority
Health Care System Revenue Bonds
Series 1995A (CGIC Insured) 5.50 2025 2,500,000 2,388,200
Minneapolis Nursing Home Revenue Bonds
Walker Cityview & Southview
Series 1992 8.50 2022 5,460,000 5,814,736
Minneapolis & St. Paul Housing &
Redevelopment Authority Health Care System
Revenue Bonds Healthspan Series 1993A (AMBAC Insured) 5.00 2013 2,955,000 2,665,144
Minnetonka Multi-family Housing
Refunding Revenue Bonds Cedar Hill West
(FHA Insured) 7.75 2026 5,535,000 5,691,807
Minnetonka Multi-family Housing Revenue Bonds
The Cedar Hills Series 1985 Inverse Floater 7.50 2017 500,000 (f) 508,385
New Brighton Tax Credit Investor Revenue Bonds
Polynesian Village Apartments Series 1995B A.M.T. 7.75 2009 2,355,000 2,380,057
Northern Municipal Power Agency Electric System
Refunding Revenue Bonds
Series 1989A 7.25 2016 5,475,000 5,813,355
<PAGE>
PAGE 70
Northern Municipal Power Agency Electric System
Pre-Refunded Revenue Bonds
Series 1989A (AMBAC Insured) 7.40 2018 1,000,000 1,087,940
Northern Municipal Power Agency Electric System
Pre-Refunded Revenue Bonds
Series 1989B (AMBAC Insured) 7.40 2018 1,800,000 1,939,536
Owatanna Public Utilities Pre-Refunded Revenue Bonds
Series 1991 6.75 2016 1,000,000 1,079,470
Plymouth Multi-family Housing Revenue Bonds
Harbor Lane Apartments Series 1993
(Asset Guaranty Insured) A.M.T. 5.90 2013 2,325,000 2,292,706
Port Authority St. Paul Unlimited Tax
General Obligation Bonds 5.125 2024 2,770,000 2,492,584
Red Wing Industrial Development
Refunding Revenue Bonds K mart Series 1993 5.50 2008 400,000 328,428
Richfield Independent School District #280
Unlimited Tax General Obligation
School Building Bonds Series 1993C
Inverse Floater (FGIC Insured) 6.58 2010 3,300,000 (f) 3,180,375
Richfield Independent School District #280
Unlimited Tax General Obligation
School Building Bonds Series 1993C Trust
Inverse Floater (FGIC Insured) 6.68 2012 2,510,000 (f) 2,378,225
Robbinsdale Hospital Pre-Refunded Revenue Bonds
North Memorial Medical Center
Series 1989 (AMBAC Insured) 7.375 2019 2,200,000 2,392,170
Rochester Health Care Facility Revenue Bonds
Mayo Foundation Series A 4.951 2019 5,000,000 4,278,050
Rochester Multi-family Housing Development
Revenue Bonds Civic Square
Series 1991 (FHA Insured) A.M.T. 7.45 2031 4,425,000 4,653,905
Roseville Health Care Facility
Refunding Revenue Bonds
Presbyterian Homes of Minnesota Series 1987 7.50 2007 2,250,000 2,315,160
Rush City Independent School District #139
Unlimited Tax School Building
Refunding Bonds School Credit Enhancement Program 5.25 2018 2,595,000 2,435,563
St. Cloud Hospital Facility
Refunding Revenue Bonds Series 1996B (AMBAC Insured) 5.00 2020 2,000,000 1,772,780
St. Cloud Hospital Facility
Refunding Revenue Bonds Series B (AMBAC Insured) 5.00 2012 2,900,000 2,680,064
St. Cloud Hospital Facility Revenue Bonds
St. Cloud Hospital Series 1990B
(AMBAC Insured) 7.00 2020 5,000,000 5,570,500
St. Cloud Hospital Facility Refunding Revenue Bonds
Series C (AMBAC Insured) 5.30 2020 1,515,000 1,392,906
St. Cloud Hydro Electric Generation Facility
Gross Revenue Bonds Series 1986 7.375 2018 1,100,000 1,133,143
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group
Series 1993 (AMBAC Insured) 5.20 2023 6,000,000 5,406,300
St. Louis Park Health Care Facilities Revenue Bonds
Healthsystem Minnesota Obligated Group Series 1993B
Inverse Floater (AMBAC Insured) 6.275 2013 7,000,000 (f) 5,766,250
St. Louis Park Health Care Facilities
Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1990A 9.25 2020 4,000,000 4,653,840
St. Louis Park Health Care Facilities
Pre-Refunded Revenue Bonds
Park Nicollet Medical Center Series 1991A 8.625 2021 2,000,000 2,312,960
St. Louis Park Multi-family Housing
Revenue Refunding Bonds
Park Blvd Towers Series 1996A 7.00 2031 4,000,000 3,983,880
St. Louis Park Multi-family Rental Housing
Revenue Bonds Mortgage Loan
Community Housing & Services
Series 1985 (FHA Insured) 7.375 2028 2,250,000 2,368,193
St. Paul & Minneapolis Housing &
Redevelopment Authority Health Care
Facility Revenue Bonds Group Health Plan Series 1992 6.75 2013 10,500,000 (h) 11,273,115
St. Paul Housing & Development Bonds
Highland Retirement (FHA Insured) 7.50 2026 5,210,000 (e) 4,871,350
St. Paul Housing & Redevelopment Authority
Hospital Facility Revenue Bonds
St. Paul Ramsey Medical Center (AMBAC Insured) 5.55 2023 5,000,000 4,758,700
St. Paul Housing & Redevelopment Authority
Commercial Development
Refunding Revenue Bonds Beverly Enterprises Series 1992 7.75 2002 2,540,000 2,615,336
<PAGE>
PAGE 71
St. Paul Housing & Redevelopment Authority
Health Care Facility Revenue Bonds
Lyngblomsten Care Center Series 1993A 7.125 2017 1,915,000 1,932,158
St. Paul Housing & Redevelopment Authority
Health Care Facility Revenue Bonds
Lyngblomsten Care Center Series 1993A 9.60 2006 1,005,000 1,057,461
St. Paul Housing & Redevelopment Authority
Health Care Facility
Multi-family Rental Housing Revenue Bonds
Lynblomsten 1993B 7.00 2024 1,910,000 1,848,173
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds
Civic Center (Secondary MBIA Insured) 5.55 2023 7,500,000 7,036,125
St. Paul Housing & Redevelopment Authority
Single Family Mortgage
Refunding Revenue Bonds Middle Income Phase II
FNMA Mortgage Backed 6.80 2028 3,460,000 3,657,428
St. Paul Independent School District #625
Unlimited Tax General Obligation Bonds (FSA Insured) 5.75 2016 3,500,000 3,487,575
Shoreview Senior Housing Revenue Bonds
Series 1996 7.25 2026 2,700,000 2,619,918
Southern Minnesota Municipal Power Agency Bonds
Escrowed to Maturity 5.75 2018 370,000 368,642
Southern Minnesota Municipal Power Agency
Power Supply System
Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured) 6.67 2019 19,500,000 (g) 5,049,330
Southern Minnesota Municipal Power Agency
Power Supply System
Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured) 6.88 2022 12,000,000 (g) 2,586,120
Southern Minnesota Municipal Power Agency
Pre-Refunded Bonds Series 1988A 8.125 2018 1,315,000 1,419,477
Southern Minnesota Municipal Power Agency
Pre-Refunded Bonds Series 1988B 8.125 2018 1,000,000 1,079,450
Southern Minnesota Municipal Power Agency
Pre-Refunded Revenue Bonds
Escrowed to Maturity Series A (Secondary MBIA Insured) 5.75 2018 1,600,000 1,594,128
Southern Minnesota Municipal Power Agency
Revenue Bonds (Secondary MBIA Insured) 4.75 2016 6,415,000 5,560,073
Southern Minnesota Municipal Power Agency
Series A (Secondary MBIA Insured) 5.75 2018 2,135,000 2,114,205
Southern Minnesota Municipal Power Agency
Un-Refunded Balance
Power Revenue Bonds Series A 5.75 2018 1,895,000 1,847,094
Spring Park Health Care Facility
Revenue Bonds Twin Birch Health Care Center
Series 1991 8.25 2011 1,780,000 1,917,772
State General Obligation Various Purpose
Pre-Refunded Bonds Series 1990 7.00 2009 7,850,000 8,511,519
State General Obligation Various Purpose
Pre-Refunded Bonds Series 1991 6.70 2011 8,000,000 8,690,240
State Higher Education Facilities Authority
Augsburg College Mortgage Revenue Bonds
Series 4-F1 6.25 2023 1,750,000 1,747,550
State Higher Education Facility Authority
Mortgage Pre-Refunded Revenue Bonds
St. Mary's College Series 2-M 8.375 2017 1,000,000 1,100,510
State Housing Facility Authority
Housing Finance Agency Housing Development
Single Family Mortgage Bonds Series B 7.25 2016 355,000 362,945
State Housing Finance Agency
Single Family Mortgage Bonds
Series 1989A A.M.T. 8.00 2029 1,265,000 1,314,664
State Housing Finance Agency
Single Family Mortgage Bonds
Series 1990A A.M.T. 7.95 2022 3,415,000 3,605,455
State Housing Finance Agency
Single Family Mortgage Bonds
Series 1991A A.M.T. 7.45 2022 3,575,000 3,727,903
State Housing Finance Agency
Single Family Mortgage Bonds Series 1992A 6.95 2016 3,130,000 3,278,769
State Housing Finance Agency
Single Family Mortgage Revenue Bonds
Series L A.M.T. 6.70 2020 1,100,000 1,125,586
State Public Facilities Authority
Water Pollution Control Revenue Bonds
Series 1989A 7.00 2009 6,250,000 6,763,313
<PAGE>
PAGE 72
State University Board of Regents
General Obligation Inverse Floater Bonds
Series 1993A Bonds 5.87 2003 5,000,000 (f) 4,775,000
State University Board of Regents
General Obligation Pre-Refunded Bonds
Series 1989A 6.00 2011 4,625,000 4,810,324
State University Board State University System
Pre-Refunded Revenue Bonds
Series 1989A (MBIA Insured) 7.40 2019 2,250,000 2,430,855
Vadnais Heights Multi-family Housing
Cottages of Vadnais Heights
Refunding Revenue Bonds
Series 1995 A.M.T. 7.00 2031 3,200,000 3,110,144
Washington County General Obligation
Capital Improvement Bonds
Series 1989A 7.00 2009-10 4,425,000 4,692,536
Washington County Housing & Redevelopment Authority
Multi-family Housing Revenue Bonds
Orleans Homes Series 1987-2 A.M.T. 9.00 2017 2,000,000 2,081,460
Western Minnesota Municipal Power Agency
Revenue Bonds
Escrowed to Maturity (AMBAC Insured) 6.75 2016 5,935,000 6,315,671
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds
Series 1987A 5.50 2015 5,000,000 4,744,200
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds
Series 1987A 6.875 2007 2,500,000 2,579,650
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds
Series 1987A 7.00 2013 7,300,000 7,537,177
Western Minnesota Municipal Power Agency
Supply Refunding Revenue Bonds
Series A (Secondary MBIA Insured) 5.50 2015 6,250,000 6,052,625
White Bear Lake Industrial Development
Revenue Bonds
Taylor Series 1988A A.M.T. 8.75 2008 2,250,000 2,447,033
_____________________________________________________________________________________________________________________________
Total investment in securities
(Cost: $383,139,342) (i) $400,295,278
______________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 73
___________________________________________________________________
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
<TABLE><CAPTION>
(Unaudited)
Rating 6-30-96 06-30-95
______________________________________________________________________
<S> <C> <C>
AAA 48% 47%
AA 18 22
A 15 16
BBB 7 6
BB and below 10 7
Non-rated 2 2
_____________________________________________________________________
Total 100% 100%
_____________________________________________________________________
</TABLE>
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FHA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of June 30, 1996, the value
of securities subject to alternative minimum tax represented 14.7%
of net assets V.R.D.B. -- Variable Rate Demand Bond
(e) Presently non-income producing. Item identified is in default
as to payment of interest and/or principal.
(f) Inverse floaters represent securities that pay interest at a
rate that increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in market short-term rates.
Interest rate disclosed is the rate in effect on June 30, 1996.
Inverse floaters in the aggregate represent 4.5% of the Fund's net
assets as of June 30, 1996.
(g) For zero coupon bonds, the interest rate disclosed represents
the annualized effective yield on the date of acquisition.
(h) Partially pledged as initial deposit on the following open
interest rate futures contracts (see Note 5 to the financial
statements):
Type of security Notional amount
Purchase contracts
___________________________________________________________________
Municipal Bonds Index Sept 1996 $18,100,000
__________________________________________________________________
(i) At June 30, 1996, the cost of securities for federal income tax
purposes was $382,381,393 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<PAGE>
PAGE 74
Unrealized appreciation $21,442,883
Unrealized depreciation (3,528,998)
___________________________________________________________________
Net unrealized appreciation $17,913,885
___________________________________________________________________
<PAGE>
PAGE 75
<TABLE>
<CAPTION>
Investments in securities
IDS New York Tax-Exempt Fund (Percentages represent value of
June 30, 1996 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (97.3%)
_____________________________________________________________________________________________________________________________
Name of issuer Coupon Maturity Principal Value(a)
and title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Battery Park City Authority
Senior Refunding Revenue Bonds Series 1993A 5.25 % 2017 $4,000,000 $ 3,557,600
Broome County Certificates of Partication
Public Safety Facility Series 1994 (MBIA Insured) 5.25 2022 2,650,000 2,423,081
Buffalo Municipal Water Agency Authority Water System
Revenue Bonds Series 1995 (FGIC Insured) 5.00 2025 1,000,000 875,690
Erie County Unlimited Tax General Obligation Bonds
Series B (FGIC Insured) 5.50 2025 700,000 665,987
Erie County Water Authority Fourth Resolution Water
Refunding Revenue Bonds Zero Coupon
Series 1992 (AMBAC Insured) 7.30 2017 1,215,000 (e) 263,047
Erie County Water Authority Water Works System
Revenue Bonds Escrowed to Maturity
Series 1990A (AMBAC Insured) 6.00 2008 1,765,000 1,871,377
Fallsburg Sullivan County Unlimited Tax General Obligation Improvement
Pre-Refunded Bonds Series 1991 7.05 2011-14 1,300,000 1,453,764
Great Neck North Water Authority Water System
Pre-Refunded Revenue Bonds Series 1989A 6.00 2020 1,415,000 1,478,505
Metropolitan Transportation Authority Commuter Facilities
1987 Service Contract Refunding Bonds Series 5 6.50 2016 1,775,000 1,796,850
Monroe County Utility General Obligation
Pre-Refunded Bonds Water Improvement System 7.10 2008-09 1,000,000 1,084,240
Municipal Assistance New York City Series 59 7.75 2006 660,000 694,538
Municipal Assistance New York City Series 62 6.75 2006 2,200,000 2,288,330
New York & New Jersey Port Authority Consolidated Revenue Bonds
Series 62 A.M.T. 8.00 2023 1,000,000 1,022,750
New York & New Jersey Port Authority Special Obligation Revenue Bonds
KIAC Partners Project Series 4 A.M.T. 6.75 2019 1,500,000 1,492,470
New York City General Obligation Bonds Series 1995B 7.00 2016 1,500,000 1,569,075
New York City General Obligation Bonds Series J 5.875 2019 1,000,000 928,600
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds Series B Inverse Floater (MBIA Insured) 6.44 2009 2,000,000 (f) 1,840,000
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds Series B (AMBAC Insured) 5.375 2019 500,000 467,795
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds Series B (MBIA Insured) 5.75 2026 500,000 490,190
New York City Unlimited Tax General Obligation Bonds
Series 1996G 5.75 2017 1,500,000 1,379,550
New York City Water Finance Authority Water & Sewer System
Pre-Refunded Revenue Bonds Series A (FGIC Insured) 6.75 2014 1,185,000 1,276,506
New York City Water Finance Authority Water & Sewer System
Revenue Bonds Series A (FGIC Insured) 6.75 2014 565,000 607,810
New York City Water Finance Authority Water & Sewer System
Revenue Pre-Refunded Bonds Series 1988A 7.00 2018 1,000,000 1,045,430
See accompanying notes to investments in securities.<PAGE>
PAGE 76
State Dormitory Authority City University System
Consolidated 3rd Resolution Revenue Bonds
Series 1994-2 (MBIA Insured) 6.25 2019 1,500,000 1,535,040
State Dormitory Authority City University System
Pre-Refunded Revenue Bonds 8.125 2017 3,400,000 3,615,798
State Dormitory Authority City University System
Revenue Bonds Series 1993A 5.75 2013 3,000,000 2,883,660
State Dormitory Authority Revenue Bonds The Devereux Foundation
Series 1995 (MBIA Insured) 5.00 2015 1,000,000 901,130
State Dormitory Authority Revenue Bonds NYACK Hospital
Series 1996 6.25 2013 1,000,000 980,530
State Dormitory Authority State University Education Facility
Pre-Refunded Revenue Bonds Series 1990A 7.70 2012 1,750,000 1,969,730
State Dormitory Authority State University Education Facility
Refunding Revenue Bonds Series 1990B 7.50 2011 1,900,000 2,192,011
State Dormitory Authority State University Education Facility
Revenue Bonds (Secondary AMBAC Insured) 5.25 2015 1,000,000 949,410
State Dormitory Authority State University Education Facility
Revenue Bonds (Secondary AMBAC Insured) 5.50 2019 2,000,000 1,936,660
State Dormitory Authority Upstate Community Colleges
Series A (Connie Lee Insured) 5.625 2012 1,500,000 1,480,545
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison Series 1986A A.M.T. 7.50 2021 1,750,000 1,800,120
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison Series 1989A A.M.T. 7.75 2024 1,000,000 1,053,100
State Energy Research & Development Authority Electric Facility
Revenue Bonds Consolidated Edison Series 1990A A.M.T. 7.50 2025 5,000,000 (h) 5,370,800
State Energy Research & Development Authority Gas Facility
Revenue Bonds Brooklyn Union Gas Series I 7.125 2020 2,000,000 2,056,980
State Energy Research & Development Authority Gas Facility
Revenue Bonds Brooklyn Union Gas Series II 7.00 2020 1,500,000 1,536,750
State Energy Research & Development Authority Pollution Control
Refunding Revenue Bonds Rochester Gas & Electric
(MBIA Insured) A.M.T. 6.50 2032 2,500,000 2,580,525
State Energy Research & Development Authority
Solid Waste Development Revenue Bonds State Gas & Electric Company
Series A (MBIA Insured) A.M.T. 5.70 2028 3,000,000 2,871,900
State Environmental Facility State Water & Pollution Control
Revolving Fund Revenue Bonds New York City
Municipal Water Finance Authority Series 1990A 7.50 2012 3,000,000 3,300,210
State Local Government Assistance Bonds Series C 5.50 2022 1,500,000 1,389,180
State Local Government Assistance Pre-Refunded Bonds
Series 1991A 7.00 2016 4,000,000 4,464,680
State Medical Care Facility Finance Agency Hospital & Nursing Home
Mortgage Revenue Bonds Montefiore Hospital
Series 1989A (FHA Insured) 7.25 2024 1,400,000 1,492,624
State Medical Care Facility Finance Agency Mental Health
Services Facility Improving Refunding Revenue Bonds
Series 1993F (Secondary FSA Insured) 5.375 2014 1,000,000 949,160
State Medical Care Facility Finance Agency Mental Health
Services Facility Improving Refunding Revenue Bonds
Series 1994A (Secondary FSA Insured) 5.25 2023 1,500,000 1,368,750
State Medical Care Facility Finance Agency Pre-Refunded Bonds
Presbyterian Hospital Series 1985B 8.00 2025 1,320,000 1,407,925
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.60 2008 1,500,000 1,633,965
State Medical Care Facility Finance Agency Revenue Bonds
Buffalo General Hospital Series 1988C (FHA Insured) 7.70 2022 1,950,000 2,128,094
State Medical Care Facility Finance Agency
Mental Health Services Facility Mental Health Services
Series F (Secondary Capital Guaranty) 5.375 2014 1,570,000 1,490,181
State Medical Care Facility Finance Agency Revenue Bonds
North Shore University Glen Cove Series A (MBIA Insured) 5.125 2012 1,000,000 926,370
State Medical Care Facility Finance Agency Secured Hospital
Revenue Bonds Series 1987A 7.10 2027 550,000 564,850
State Mortgage Agency Homeowner Mortgage Revenue Bonds
Series TT 7.50 2015 4,000,000 4,238,440
State Mortgage Agency Homeowner Mortgage Revenue Bonds
Series 27 6.90 2015 3,000,000 (h) 3,155,670
State Mortgage Agency Revenue Bonds
Series 9 A.M.T. 7.30 2017 970,000 993,241
State Thruway Authority Local Highway & Bridge Service
Contract Bonds Series 1991 6.00 2011 2,500,000 2,440,925
State Urban Development Correction Facility
Pre-Refunded Revenue Bonds Series 1 (FSA Insured) 7.50 2020 4,500,000 4,999,725
State Urban Development Correctional Capital Facilities
Refunding Revenue Bonds Series 1993A 5.25 2021 2,500,000 2,171,625
State Urban Development Correctional Capital Facilities
Revenue Bonds Series 5 (MBIA Insured) 5.50 2025 750,000 710,812
<PAGE>
PAGE 77
State Urban Development Revenue Bonds
Higher Education Applied Technology Grants
Series 1995 (MBIA Insured) 5.75 2015 1,000,000 995,360
Triborough Bridge & Tunnel Authority
General Purpose Pre-Refunded Revenue Bonds Series S 7.00 2021 3,000,000 3,322,920
Triborough Bridge & Tunnel Authority
Special Obligation Refunding Bonds Series 1991B (FGIC Insured) 6.875 2015 2,000,000 2,138,140
United Nations Development Senior Lien
Refunding Revenue Bonds Series 1992A 6.00 2026 4,500,000 4,432,275
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $110,308,011) $117,002,996
_____________________________________________________________________________________________________________________________
Short-term security (0.8%)
______________________________________________________________________________________________________________________________
Issuer (c,d,g) Effective Amount Value (a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
Municipal note
New York City Municipal Water Authority
Water & Sewer System Revenue Bonds (FGIC Insured) V.R.
06-15-23 3.60 900,000 900,000
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $900,000) $ 900,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $111,208,011)(i) $117,902,996
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 78
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
(Unaudited)
Rating 06-30-96 06-30-95
___________________________________________________________________
AAA 52% 55%
AA 18 20
A 15 15
BBB 14 10
BB and below 1 --
Non-rated -- --
___________________________________________________________________
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation are used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of June 30, 1996, the value
of securities subject to alternative minimum tax represented 14.3%
of net assets. V.R. -- Variable Rate
(e) For zero coupon bonds, the interest rate disclosed represents
the annualized yield on the date of acquisition.
(f) Inverse floaters represent securities that pay interest at a
rate that increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in market short-term rates.
Interest rate disclosed is the rate in effect on June 30, 1996.
Inverse floaters in the aggregate represent 1.5% of the fund's net
assets as of June 30, 1996.
(g) Interest rate varies to reflect current market conditions; rate
shown is the effective rate on June 30, 1996.
(h) Partially pledged as initial deposit on the following open
interest rate futures contracts (see Note 5 to the financial
statements):
Type of security Notional amount
Purchase contracts
___________________________________________________________________
Municipal Bonds Index Sept. 1996 $6,400,000
___________________________________________________________________
<PAGE>
PAGE 79
(i) At June 30, 1996, the cost of securities for federal income tax
purposes was $110,149,750 and the gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $7,628,819
Unrealized depreciation (875,573)
___________________________________________________________________
Net unrealized appreciation $6,753,246
___________________________________________________________________
<PAGE>
PAGE 80
<TABLE>
<CAPTION>
Investments in securities
IDS Ohio Tax-Exempt Fund
June 30, 1996 (Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Municipal bonds (98.7%)
_____________________________________________________________________________________________________________________________
Name of issuer and Coupon Maturity Principal Value(a)
title of issue (b,c,d) rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Barberton Limited Tax Various Purpose General Obligation Bonds
Series 1989-1 7.35 % 2009 $ 700,000 $ 763,672
Bellefontaine Hospital Facility
Refunding Revenue Bonds
Mary Rutan Health Association of Logan County
Series 1993 6.00 2013 1,000,000 933,460
Buckeye Valley Local School District School Improvement Unlimited Tax
General Obligation Bonds Series 1995A (MBIA Insured) 5.25 2020 1,000,000 928,590
Butler County Hospital Facility Improvement
Refunding Revenue Bonds 7.50 2010 1,750,000 1,854,125
Carroll Water & Sewer District
Water System Improvement Unlimited Tax
General Obligation Bonds 6.25 2010 1,000,000 939,400
Clermont County Hospital Facility Revenue Bonds
Mercy Health System Province of Cincinnati
Series 1989A (AMBAC Insured) 7.50 2019 750,000 831,663
Cleveland Airport Systems Revenue Bonds
Series 1990A (MBIA Insured) A.M.T. 7.40 2020 500,000 539,200
Cleveland General Obligation Pre-Refunded Bonds 7.375 2003 125,000 132,661
Cleveland Public Power System 1st Mortgage
Pre-Refunded Revenue Bonds 8.375 2017 100,000 106,809
Cleveland Waterworks Improvement 1st Mortgage
Refunding Revenue Bonds
Series F 1992B (AMBAC Insured) 6.25 2016 1,000,000 (f) 1,025,850
Cleveland Waterworks Improvement 1st Mortgage
Revenue Bonds Series 1987E 6.00 2017 200,000 198,368
Cleveland Waterworks Improvement 1st Mortgage
Pre-Refunded Revenue Bonds Series 1987E 7.875 2016 650,000 676,481
Coshocton County Solid Waste Disposal Refunding Revenue Bonds
Stone Container Series 1992 7.875 2013 1,000,000 1,052,400
Cuyahoga County Hospital Improvement Revenue Bonds
Cleveland Clinic Foundation 7.00 2013 500,000 511,010
Cuyahoga County Hospital Improvement Pre-Refunded Revenue Bonds
Cleveland Clinic Foundation Series 1987A 7.875 2010 275,000 295,361
Cuyahoga County Hospital Improvement Revenue Bonds
Mount Sinai Medical Center Series 1991 (AMBAC Insured) 6.625 2021 600,000 661,542
Cuyahoga County Hospital Improvement Revenue Bonds
University Hospitals Health System
Series 1992 (AMBAC Insured) 6.50 2011 500,000 527,685
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992 5.50 2011 1,500,000 1,475,460
Cuyahoga County Hospital Refunding Revenue Bonds
Mount Sinai Medical Center Series 1987A 8.125 2014 400,000 430,356
Cuyahoga County Hospital Revenue Bonds
Meridia Health Series 1991 7.00 2023 1,000,000 (f) 1,071,560
See accompanying notes to investments in securities.<PAGE>
PAGE 81
Cuyahoga County Limited Tax General Obligation Bonds 5.60 2013 500,000 487,190
Cuyahoga Hospital Revenue Bonds Metrohealth System
Series 1989 (MBIA Insured) 6.00 2019 1,000,000 1,001,200
Dayton International Airport Refunding Revenue Bonds (AMBAC Insured) 5.25 2015 2,000,000 1,879,360
Delaware County Sewer Improvement Limited Tax
General Obligation Bonds 5.25 2015 1,000,000 935,250
Dover Limited Tax Improvement General Obligation Bonds
Municipal Sewer System 7.10 2009 1,000,000 1,083,510
Dublin City School District: Franklin, Delaware, & Union Counties
Unlimited General Obligation School Building
Improvement Bonds Series 1995 (FGIC Insured) 5.00 2018 1,500,000 1,352,175
Elyria Limited Tax Improvement General Obligation
Recreation Facility Bonds 7.10 2009 715,000 774,710
Erie County Hospital Improvement Refunding Revenue Bonds
Firelands Community Hospital Series 1992 6.75 2015 2,000,000 2,088,380
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation
Pre-Refunded Bonds (MBIA Insured) 7.00 2019 1,500,000 1,660,110
Hamilton County Sewer System Improvement
Metropolitan Sewer District of Greater Cincinnati
Refunding Revenue Bonds Series A (FGIC Insured) 5.50 2017 1,000,000 970,580
Highland Heights Limited Tax Improvement
General Obligation Street Bonds 7.75 2008 400,000 434,108
Hilliard County School District Unlimited Tax
General Obligation Bonds Series A (FGIC Insured) 5.00 2020 1,000,000 896,160
Kettering School District Improvement General Obligation Bonds
(FGIC Insured) 5.25 2022 1,000,000 926,060
Lake County Water System Limited Tax Improvement
General Obligation Pre-Refunded Bonds Series 1987-2 8.125 2010 700,000 753,319
Lakewood Unlimited Tax General Obligation Bonds 5.50 2015 1,500,000 1,459,815
Lakota Local School District Butler County School
Unlimited Tax Improvement Bonds 7.00 2012 500,000 537,765
Lakota Local School District Butler County School
Unlimited Tax Improvement Pre-Refunded Bonds 7.90 2011 200,000 216,594
Lakota Local School District Unlimited Tax Improvement
General Obligation Bonds (AMBAC Insured) 6.25 2014 2,000,000 2,073,340
Lima Limited Tax Improvement General Obligation
Sanitary Sewer System Pre-Refunded Bonds 8.25 2012 200,000 215,722
Lorain County Hospital Facilities Refunding Revenue Bonds
EMH Regional Medical Center Series 1995 (AMBAC Insured) 5.375 2021 2,000,000 1,872,600
Lucas County Hospital Refunding Revenue Bonds
St. Vincent's Medical Center Series B (MBIA Insured) 5.25 2020 2,000,000 1,836,080
Lucas County Hospital Pre-Refunded Revenue Bonds
Toledo Hospital (MBIA Insured) 7.00 2014 100,000 102,819
Mahoning County Hospital Improvement Bonds
Western Reserve Care System (MBIA Insured) 5.375 2015 1,000,000 947,610
Marietta Sewer System Improvement Bonds (BIG Insured) 7.50 2007 200,000 211,802
Marion County Health Care Facilities Improvement Refunding Revenue
Bonds United Church Homes Series 1993 6.375 2010 1,000,000 975,600
Marysville Sewer System 1st Mortgage Revenue Bonds
Series 1988 (BIG Insured) A.M.T. 7.85 2008 400,000 427,128
Marysville Water System Mortgage Revenue Bonds
Series 1991 (MBIA Insured) 7.05 2021 1,000,000 1,115,550
Medina County Hospital Revenue Bonds Medina County
Community Hospital Series 1987 (AMBAC Insured) 6.875 2016 100,000 104,689
Miami County Hospital Facility Refunding Revenue Bonds
Upper Valley Medical Center Series 1987A 8.375 2013 75,000 78,275
Montgomery County Health Facilities Revenue Bonds
Friendship Village Dayton Series 1990A 9.25 2016 1,000,000 1,046,440
Montgomery County Hospital Facility
Refunding Revenue & Improvement Bonds
Ketter Medical Center
Series 1996 (MBIA Insured) 5.50 2026 1,000,000 953,530
Montgomery County Water Revenue Bonds
Greater Moraine - Beavercreek District (FGIC Insured) 6.25 2017 1,000,000 1,030,120
Parma Hospital Improvement Revenue Bonds
Parma Community General Hospital
Series 1989B (MBIA Insured) 7.125 2013 500,000 535,220
Pickerington Local School District Unlimited Tax
General Obligation Pre-Refunded Bonds (AMBAC Insured) 7.00 2013 1,000,000 1,106,740
Rural Loraine County Water Authority Water Resource Improvement
Pre-Refunded Revenue Bonds Series 1991 (AMBAC Insured) 7.00 2011 1,000,000 1,110,340
Southwest Licking Local School District School Facilities
Unlimited Tax General Obligation Bonds (FGIC Insured) 5.75 2022 1,000,000 993,230
Southwest Local School District Hamilton & Butler Counties School
Unlimited Tax Improvement Bonds (AMBAC Insured) 7.65 2010 500,000 561,480
State Air Quality Development Authority Refunding Revenue Bonds
JMG Funding Limited Partnership (AMBAC Insured) A.M.T. 6.375 2029 500,000 514,925
State Air Quality Development Authority Refunding Revenue Bonds
Series 1994 (AMBAC Insured) A.M.T. 6.375 2029 2,000,000 2,059,700
<PAGE>
PAGE 82
State Air Quality Development Authority Revenue Bonds
Cleveland Electric Illuminating Series A 7.00 2009 345,000 334,360
State Air Quality Development Authority Revenue Bonds
Columbus & Southern Series A (FGIC Insured) 6.375 2020 1,000,000 1,037,170
State Building Authority Local Jail Grant Bonds
Series 1989A (MBIA Insured) 7.35 2009 500,000 554,040
State Building Authority State Correctional Facility
Revenue Bonds Series B 7.125 2009 75,000 76,826
State Building Authority State Facility Pre-Refunded Bonds
Columbus State Office Building Series 1985C 7.35 2005 1,000,000 1,109,720
State Higher Educational Facility Pre-Refunded Revenue Bonds
Oberlin College Series 1989 7.375 2014 500,000 549,475
State Housing Finance Agency Mortgage Revenue Bonds
Aristocrat South Board & Care
Series 1991A (FHA Insured) A.M.T. 7.30 2031 1,500,000 1,561,080
State Housing Finance Agency Single Family Mortgage
Revenue Bonds Series 1990A (GNMA Insured) A.M.T. 7.80 2030 560,000 588,297
State Housing Finance Agency Single Family Mortgage
Revenue Bonds Series 1990C (GNMA Insured) A.M.T. 7.85 2021 855,000 900,409
State Municipal Electric Generation Agency Joint Venture #5
Revenue Bonds (AMBAC Insured) 5.375 2024 2,000,000 1,867,880
State Turnpike Revenue Bonds Series A 5.75 2024 1,000,000 975,600
State Turnpike Revenue Bonds Series A (MBIA Insured) 5.50 2026 1,000,000 953,630
State Valley School District School Improvement Unlimited Tax
General Obligation Bonds Counties of Adams & Highland
Series 1995 (MBIA Insured) 5.25 2021 2,000,000 1,854,580
State Water & Air Quality Development Authority
Cleveland Electric Illumination
Pollution Control Refunding Revenue Bonds
Series 1995 7.70 2025 1,000,000 1,013,420
State Water Development Authority Bonds Toledo Edison
Series 1994 A.M.T. 8.00 2023 1,000,000 1,019,550
State Water Development Authority Pollution Control
Revenue Bonds Phillip Morris 7.25 2008 150,000 158,261
State Water Development Authority Water Development
Pre-Refunded Bonds Pure Water Series 1987I 7.75 2006-14 200,000 211,182
State Water Development Authority Water Development
Pre-Refunded Bonds Pure Water Series 1988I 7.00 2014 500,000 525,920
State Water Development Authority Water Development
Refunding Revenue Bonds Pure Water (AMBAC Insured) 5.50 2018 750,000 719,212
State Water Development Solid Waste Disposal
Northstar BHP Steel LLC-Cargill Series 1995
Revenue Bonds A.M.T. 6.30 2020 500,000 510,195
Summit County Industrial Development Revenue Bonds
Century Products 7.75 2005 100,000 103,966
Summit County Limited Tax General Obligation Pre-Refunded Bonds
Human Services Facility (AMBAC Insured) 8.00 2007 100,000 107,576
Sycamore Board of Education Community School District
Hamilton County School Improvement Bonds 6.50 2009 500,000 519,175
University General Receipts Refunding Revenue Bonds
Student Recreation Center (FGIC Insured) 5.00 2013 1,000,000 901,780
University of Cincinnati General Receipt
Pre-Refunded Bonds Series I-1 7.10 2010 750,000 816,668
University of Toledo General Receipt
Pre-Refunded Bonds Series 1990 (MBIA Insured) 7.125 2020 500,000 551,120
Warren County Various Purpose Limited Tax
General Obligation Bonds Series 1992 6.10 2012 500,000 524,395
Whitehall City School District Franklin County Unlimited Tax
Improvement General Obligation Pre-Refunded
School Building Construction 7.25 2013 500,000 550,915
_____________________________________________________________________________________________________________________________
Total municipal bonds
(Cost: $69,240,999) $72,881,281
</TABLE>
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
Short-term security (0.2%)
_____________________________________________________________________________________________________________________________
Issuer (d,e) Effective Amount Value(a)
yield payable at
maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Municipal note
State Air Quality Development Authority Revenue Bonds
Cincinati Gas & Electric
Series A V.R.
09-01-30 3.55% $100,000 $ 100,000
<PAGE>
PAGE 83
_____________________________________________________________________________________________________________________________
Total short-term security
(Cost: $100,000) 100,000
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $69,340,999)(g) $72,981,281
___________________________________________________________________________________________________________________________
</TABLE>
Notes to investments in securities
___________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Investments in bonds, by rating category as a percentage of
total bonds, are as follows:
Rating 06-30-96 12-31-95
___________________________________________________________________
AAA 68% 68%
AA 10
A 9 10
BBB 7 6
B and below 6 6
Non-rated -- --
___________________________________________________________________
Total 100% 100%
___________________________________________________________________
(c) The following abbreviations are used in portfolio descriptions
to identify the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(d) The following abbreviation is used in portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of June 30, 1996, the value
of securities subject to alternative minimum tax represented 11.0%
of net assets. V.R. -- Variable Rate
(e) Interest rate varies to reflect current market conditions; rate
shown is the effective rate on June 30, 1996.
(f) Partially pledged as initial deposit on the following open
interest rate futures contracts (see Note 5 to the financial
statements):
Type of security Notional amount
___________________________________________________________________
Purchase contracts
Municipal Bonds Index Sept. 1996 $3,200,000
___________________________________________________________________
<PAGE>
PAGE 84
(g) At June 30, 1996, the cost of securities for federal income tax
purposes was $ and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation $
Unrealized depreciation
___________________________________________________________________
Net unrealized appreciation $
___________________________________________________________________
<PAGE>
PAGE 85
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 86
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) shield with eagle head enclosed
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column enclosed
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with star enclosed
<PAGE>
PAGE 87
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Managed Allocation Fund
Invests in U.S. equity securities, U.S. and foreign debt
securities, foreign equity securities and money market instruments.
The fund provides diversification among these major investment
categories and has a target mix that represents the way the fund's
investments will be allocated over the long term. Seeks maximum
total return.
(icon of) bird in a nest
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors of
the economy. Seeks current income and growth of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
<PAGE>
PAGE 88
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities
comprising the S&P SmallCap 600 Index, as it strives to provide
long-term capital appreciation.
(icon of) office building
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
<PAGE>
PAGE 89
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests primarily in equity securities of companies included in the
S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the
Research Department of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
fund frequently changes its industry mix.
(icon of) dimension
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
<PAGE>
PAGE 90
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your financial advisor or writing to American Express Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it
carefully before you invest or send money.
<PAGE>
PAGE 91
Federal income tax information
IDS California Tax-Exempt Fund
_____________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on Form 1099-DIV, Dividends and Distributions, last
January. Dividends paid to you since the end of last year will be
reported to you on a tax statement sent next January.
IDS California Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest distributions taxable status explained below.
Payable date Per share
July 26, 1995 $0.02289
Aug. 25, 1995 0.02293
Sept. 25, 1995 0.02441
Oct. 26, 1995 0.02385
Nov. 27, 1995 0.02512
Dec. 27, 1995 0.02282
Jan. 25, 1996 0.02193
Feb. 26, 1996 0.02590
March 27, 1996 0.02315
April 26, 1996 0.02353
May 28, 1996 0.02433
June 26, 1996 0.02235
Total $0.28321
Taxable dividend -- short-term capitalgain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00006
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.02950
Total distributions $0.31277
<PAGE>
PAGE 92
Class B
Exempt-interest dividends taxable status explained below.
Payable date Per share
July 26, 1995 $0.01968
Aug. 25, 1995 0.01977
Sept. 25, 1995 0.02109
Oct. 26, 1995 0.02050
Nov. 27, 1995 0.02162
Dec. 27, 1995 0.01950
Jan. 25, 1996 0.01872
Feb. 26, 1996 0.02238
March 27, 1996 0.01991
April 26, 1996 0.02036
May 28, 1996 0.02098
June 26, 1996 0.01934
Total $0.24385
Taxable dividend -- short-term capital gain taxable as dividend
income
Payable date Per share
Dec. 27, 1995 $0.00006
Capital gain distribution -- taxable as long-term capital gains.
Payable date Per share
Dec. 27, 1995 $0.02950
Total distributions $0.27341
Class Y
Exempt-interest dividends taxable status explained below.
Payable date Per share
July 26, 1995 $0.02369
Aug. 25, 1995 0.02388
Sept. 25, 1995 0.02514
Oct. 26, 1995 0.02472
Nov. 27, 1995 0.02581
Dec. 27, 1995 0.02378
Jan. 25, 1996 0.02276
Feb. 26, 1996 0.02660
March 27, 1996 0.02372
April 26, 1996 0.02445
May 28, 1996 0.02506
June 26, 1996 0.02325
Total $0.29286
<PAGE>
PAGE 93
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00006
Capital gain distribution -- taxable as long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.02950
Total distributions $0.32242
Source of distributions
100% of exempt-interest distributions during the fiscal year ended
June 30, 1996 was derived from interest on California municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 94
Federal income tax information
IDS Massachusetts Tax-Exempt Fund
__________________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on your year-end statement, last January.
Dividends paid to you since the end of last year will be reported
to you on a statement sent next January.
IDS Massachusetts Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest dividends--taxable status explained below.
Payable date Per share
July 26, 1995 $0.02320
Aug. 25, 1995 0.02323
Sept. 25, 1995 0.02461
Oct. 26, 1995 0.02400
Nov. 27, 1995 0.02538
Dec. 27, 1995 0.02170
Jan. 25, 1996 0.02220
Feb. 26, 1996 0.02612
March 27, 1996 0.02321
April 26, 1996 0.02381
May 28, 1996 0.02348
June 26, 1996 0.02133
Total distributions $0.28227
Class B
Exempt-interest dividends--taxable status explained below.
Payable date Per share
July 26, 1995 $0.01997
Aug. 25, 1995 0.02000
Sept. 25, 1995 0.02121
Oct. 26, 1995 0.02058
Nov. 27, 1995 0.02181
Dec. 27, 1995 0.01831
Jan. 25, 1996 0.01892
Feb. 26, 1996 0.02252
March 27, 1996 0.01993
April 26, 1996 0.02055
May 28, 1996 0.02001
June 26, 1996 0.01820
Total distributions $0.24201
<PAGE>
PAGE 95
Class Y
Exempt-interest dividends--taxable status explained below.
Payable date Per share
July 26, 1995 $0.02389
Aug. 25, 1995 0.02393
Sept. 25, 1995 0.02538
Oct. 26, 1995 0.02469
Nov. 27, 1995 0.02617
Dec. 27, 1995 0.02263
Jan. 25, 1996 0.02335
Feb. 26, 1996 0.02714
March 27, 1996 0.02414
April 26, 1996 0.02468
May 28, 1996 0.02427
June 26, 1996 0.02222
Total distributions $0.29249
Source of distributions
100% of exempt interest distributions during the fiscal year ended
June 30, 1996 was derived from interest on Massachusetts municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 96
Federal income tax information
IDS Michigan Tax-Exempt Fund
_____________________________________________________
The fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on your year-end statement, last January. Dividends
paid to you since the end of last year will be reported to you on a
tax statement sent next January.
IDS Michigan Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02397
Aug. 25, 1995 0.02388
Sept. 25, 1995 0.02547
Oct. 26, 1995 0.02473
Nov. 27, 1995 0.02674
Dec. 27, 1995 0.02469
Jan. 25, 1996 0.02243
Feb. 26, 1996 0.02718
March 27, 1996 0.02404
April 26, 1996 0.02458
May 28, 1996 0.02546
June 26, 1996 0.02222
Total $0.29539
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.04082
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.02901
Total distributions $0.36522
Class B
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02062
Aug. 25, 1995 0.02057
Sept. 25, 1995 0.02200
Oct. 26, 1996 0.02121
Nov. 27, 1995 0.02307
Dec. 27, 1995 0.02121
Jan. 25, 1996 0.01910
Feb. 26, 1996 0.02350
March 27, 1996 0.02065
April 26, 1996 0.02129
May 28, 1996 0.02192
June 26, 1996 0.01904
Total $0.25418
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.04082
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1996 $0.02901
Total distributions $0.32401
Class Y
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02458
Aug. 25, 1995 0.02479
Sept. 25, 1995 0.02631
Oct. 26, 1996 0.02577
Nov. 27, 1995 0.02753
Dec. 27, 1995 0.02531
Jan. 25, 1996 0.02320
Feb. 26, 1996 0.02801
March 27, 1996 0.02466
April 26, 1996 0.02556
May 28, 1996 0.02615
June 26, 1996 0.02321
Total distributions $0.30508
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.04082
<PAGE>
PAGE 97
Capital gain distribution -- taxable for long-term capital gain
Payable date Per share
Dec. 27, 1995 $0.02901
Source of distributions
100% of exempt-interest distributions during the fiscal year ended
June 30, 1996 was derived from interest on Michigan municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 98
Federal income tax information
IDS Minnesota Tax-Exempt Fund
_____________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on your year-end statement, last January. Dividends
paid to you since the end of last year will be reported to you on a
tax statement sent next January.
IDS Minnesota Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02459
Aug. 25, 1995 0.02423
Sept. 25, 1995 0.02553
Oct. 26, 1995 0.02507
Nov. 27, 1995 0.02664
Dec. 27, 1995 0.02411
Jan. 25, 1996 0.02329
Feb. 26, 1996 0.02790
March 27, 1996 0.02469
April 26, 1996 0.02484
May 28, 1996 0.02520
June 26, 1996 0.02309
Total $0.29923
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00024
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00369
Total distributions $0.30316
<PAGE>
PAGE 99
Class B
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02139
Aug. 25, 1995 0.02104
Sept. 25, 1995 0.02218
Oct. 26, 1995 0.02171
Nov. 27, 1995 0.02318
Dec. 27, 1995 0.02080
Jan. 25, 1996 0.02007
Feb. 26, 1996 0.02436
March 27, 1996 0.02142
April 26, 1996 0.02165
May 28, 1996 0.02180
June 26, 1996 0.02001
Total $0.25961
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00024
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00369
Total distributions $0.26354
<PAGE>
PAGE 100
Class Y
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02535
Aug. 25, 1995 0.02477
Sept. 25, 1995 0.02633
Oct. 26, 1995 0.02605
Nov. 27, 1995 0.02738
Dec. 27, 1995 0.02554
Jan. 25, 1996 0.02426
Feb. 26, 1996 0.02866
March 27, 1996 0.02530
April 26, 1996 0.02577
May 28, 1996 0.02618
June 26, 1996 0.02372
Total $0.30931
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00024
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00369
Total distributions $0.31324
Source of distributions
100% of exempt-interest distributions during the fiscal year ended
June 30, 1996 was derived from interest on Minnesota municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 101
Federal income tax information
IDS New York Tax-Exempt Fund
_____________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on your year-end statement, last January. Dividends
paid to you since the end of last year will be reported to you on a
tax statement sent next January.
IDS New York Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02720
Aug. 25, 1995 0.02324
Sept. 25, 1995 0.02461
Oct. 26, 1995 0.02396
Nov. 27, 1995 0.02540
Dec. 27, 1995 0.02311
Jan. 25, 1996 0.02245
Feb. 26, 1996 0.02614
March 27, 1996 0.02323
April 26, 1996 0.02367
May 28, 1996 0.02390
June 26, 1996 0.02153
Total distributions $0.28844
Class B
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02405
Aug. 25, 1995 0.02011
Sept. 25, 1995 0.02132
Oct. 26, 1995 0.02066
Nov. 27, 1995 0.02197
Dec. 27, 1995 0.01986
Jan. 25, 1996 0.01929
Feb. 26, 1996 0.02266
March 27, 1996 0.02005
April 26, 1996 0.02054
May 28, 1996 0.02058
June 26, 1996 0.01853
Total distributions $0.24962
<PAGE>
PAGE 102
Class Y
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02810
Aug. 25, 1995 0.02416
Sept. 25, 1995 0.02520
Oct. 26, 1995 0.02493
Nov. 27, 1995 0.02655
Dec. 27, 1995 0.02409
Jan. 25, 1996 0.02309
Feb. 26, 1996 0.02721
March 27, 1996 0.02390
April 26, 1996 0.02452
May 28, 1996 0.02464
June 26, 1996 0.02231
Total distributions $0.29870
Source of distributions
100% of exempt-interest distributions during the fiscal year ended
June 30, 1996 was derived from interest on New York municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax adviser about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 103
Federal income tax information
IDS Ohio Tax-Exempt Fund
_____________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on Form 1099-DIV, Dividends and Distributions, last
January. Dividends paid to you since the end of last year will be
reported to you on a tax statement sent next January.
IDS Ohio Tax-Exempt Fund
Fiscal year ended June 30, 1996
Class A
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02238
Aug. 25, 1995 0.02053
Sept. 25, 1995 0.02497
Oct. 26, 1995 0.02431
Nov. 27, 1995 0.02565
Dec. 27, 1995 0.02354
Jan. 25, 1996 0.02262
Feb. 26, 1996 0.02635
March 27, 1996 0.02345
April 26, 1996 0.02394
May 28, 1996 0.02478
June 26, 1996 0.02303
Total $0.28555
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00007
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00966
Total distributions $0.29528
Class B
<PAGE>
PAGE 104
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.01909
Aug. 25, 1995 0.01728
Sept. 25, 1995 0.02154
Oct. 26, 1995 0.02087
Nov. 27, 1995 0.02209
Dec. 27, 1995 0.02018
Jan. 25, 1996 0.01933
Feb. 26, 1996 0.02275
March 27, 1996 0.02012
April 26, 1996 0.02067
May 28, 1996 0.02128
June 26, 1996 0.01989
Total $0.24509
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00007
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00966
Total distributions $0.25482
Class Y
Exempt-interest dividends -- taxable status explained below.
Payable date Per share
July 26, 1995 $0.02311
Aug. 25, 1995 0.02144
Sept. 25, 1995 0.02577
Oct. 26, 1995 0.02544
Nov. 27, 1995 0.02646
Dec. 27, 1995 0.02459
Jan. 25, 1996 0.02347
Feb. 26, 1996 0.02722
March 27, 1996 0.02431
April 26, 1996 0.02495
May 28, 1996 0.02563
June 26, 1996 0.02402
Total distributions $0.29641
<PAGE>
PAGE 105
Taxable dividend -- short-term capital gain taxable as dividend
income.
Payable date Per share
Dec. 27, 1995 $0.00007
Capital gain distribution -- taxable for long-term capital gain.
Payable date Per share
Dec. 27, 1995 $0.00966
Total distributions $0.30614
Source of distributions
100% of exempt-interest distributions during the fiscal year ended
June 30, 1996, was derived from interest on Ohio municipal
securities.
Federal taxation
Exempt-interest dividends are exempt from federal income taxes and
should not be included in shareholders' gross income.
Other taxation
Exempt-interest dividends may be subject to state and local taxes.
Each shareholder should consult a tax advisor about reporting this
income for state and local tax purposes.
<PAGE>
PAGE 106
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial advisor:
IDS State Tax-Exempt Funds
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 107
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
