Study Says Taxpayers Impacted by AMT Expected to Grow 10-fold by 2010¹

BOSTON, January 12, 2004 - Fidelity Investments^® today announced that all five of its Spartan Municipal Money Market Funds are being managed with the goal of investing only in securities paying interest that is exempt from the federal Alternative Minimum Tax (AMT) effective January 1, 2004. The move will provide greater mutual fund choices for the fast growing number of investors affected by the AMT.

"By the end of the decade, the number of Americans impacted by the AMT is expected to increase by more than 10-fold¹," said Sanjiv Mirchandani, executive vice president, Fidelity Personal Investments. "We want to be in the forefront of providing tax-sensitive investors with a number of product choices by managing all of our Spartan Municipal Money Market funds with the goal of being AMT-free."

The five Spartan Municipal Money Market funds that now aim to be AMT-free are Spartan Municipal Money Fund, Spartan California Municipal Money Market Fund, Spartan Massachusetts Municipal Money Market Fund, Spartan New Jersey Municipal Money Market Fund, and Spartan New York Municipal Money Market Fund.

Previously, all five funds were able to invest up to 20% of their assets in municipal securities whose interest was subject to the federal AMT. Now these funds will not normally invest in municipal securities whose interest is subject to the federal AMT. Currently, the types of municipal securities that may be subject to AMT include those bonds issued by a private entity for a project that will benefit the public, such as an airport or stadium. For regular tax purposes, interest on these types of private activity bonds is free from federal income tax, but the interest is subject to tax under the federal AMT.

"The intent of the AMT -- which was first enacted in 1970 -- was to ensure that a small number of high-income individuals who -- because of large deductions -- may not be subject to regular federal income taxes would be required to pay some federal taxes," added Mirchandani. "However, as the Urban-Brookings study has shown, the number of taxpayers paying the AMT is now poised to skyrocket."

According to the Urban-Brookings Tax Policy Center, "By 2010, the AMT will affect 33 million taxpayers - about one-third of all taxpayers - up from 1 million in 1999…The AMT will be the de facto tax system for households with income between $100,000 and $500,000, more than 92 percent of whom will face the tax."1 The Center also notes, "In particular, the tax will hammer families with children and those that live in high tax states. The AMT does not allow parents to claim exemptions for their children." and "…does not allow deductions for state taxes…"²

Fidelity also offers two other retail fixed-income funds that are managed with the goal of minimizing the amount of AMT securities they invest in -- Fidelity Tax-Free Money Market Fund and Spartan Tax-Free Bond Fund. Generally, the Securities and Exchange Commission (SEC) requires that a "tax-free" or "tax-exempt" fund invest at least 80 percent in securities that are free of federal income and alternative minimum taxes. Fidelity Tax-Free Money Market aims to invest 100 percent and Spartan Tax-Free Bond invests at least 95 percent in AMT-free securities. As of October 31, 2003, Spartan Tax-Free Bond was fully invested in AMT-free securities.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $1.7 trillion, including managed assets of $954.3 billion as of November 30, 2003. Fidelity offers investment management, retirement planning, brokerage, human resources and benefits outsourcing services to 18 million individuals and institutions as well as through 5,500 financial intermediaries. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm. For more information about Fidelity Investments, visit www.Fidelity.com.

¹ The AMT: Projections & Problems, Urban-Brookings Tax Policy Center, printed in Tax Notes, 7/7/03
² The AMT: Out of Control, Urban-Brookings Tax Policy Center, Tax Policy Issues and Options, 9/5/02

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An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in these funds.

The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Interest rate increases can cause the price of a debt security to decrease.

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