PUTNAM PENNSYLVANIA TAX EXEMPT INCOME FUND
Prospectus Supplement dated February 10, 1994
to Prospectus dated July 1, 1993
The first two paragraphs of the section "Pennsylvania tax" on
page 29 are replaced by the following:
To the extent that distributions are derived from interest on
Pennsylvania Tax Exempt Securities, such distributions will be
exempt from Pennsylvania personal and corporate income tax and
the income tax imposed by the Philadelphia school district. (The
exemption from Pennsylvania personal income tax the Philadelphia
school district income tax will also extend to interest on
obligations of the United States, its territories and certain of
its agencies and instrumentalities which pay interest excludable
from taxable income under the Constitution or laws of the United
States.)
For Pennsylvania personal income tax purposes, distributions by
the Fund derived from income on investments other than
Pennsylvania Tax Exempt Securities and obligations of the United
States, its territories and certain of its agencies and
instrumentalities will be taxable, whether paid in cash or
reinvested in additional shares. Distributions derived from net
gains on all securities (including Pennsylvania Tax Exempt
Securities and obligations of the United States its territories
and certain of its agencies and instrumentalities the interest on
which is not taxable for Pennsylvania personal income tax
purposes) will be taxable under the Pennsylvania personal income
tax law. Individual shareholders of the Fund who are subject to
the personal property taxes levied by certain Pennsylvania
counties, cities and school districts will be exempt from such
tax on their shares of the Fund to the extent that the Fund's
portfolio consists of Pennsylvania Tax Exempt Securities and
obligations of the United States, its territories and certain of
its agencies and instrumentalities. Corporations are not subject
to Pennsylvania personal property taxes.
