From Yahoo Finance · · 1m
SPAXX Pays More State Tax Than FDLXX
SPAXX holders pay $3,700 more in state taxes over 20 years than FDLXX holders for same yield.
In brief
SPAXX holders pay $3,700 more in state taxes over 20 years than FDLXX holders for same yield. SPAXX's 45% state-taxable interest costs $3,700 more than FDLXX's 3% taxable portion over 20 years at identical expense ratios. Originally reported by Yahoo Finance.
SPAXX Tax Profile
SPAXX calls itself a government fund but only 55% of its income qualifies for state-tax exemption.
“SPAXX calls itself a government fund yet only 55% of its income qualifies for state-tax exemption, leaving 45% fully taxable as ordinary income”
Tax Savings Comparison
Switching $250,000 to FDLXX saves $184 annually in state taxes, totaling $3,700 over 20 years.
“Switching $250,000 to treasury-only fdlxx saves about $184 per year in state taxes which adds up to roughly $3700 more over 20 years at identical 0.42 percent expense ratios”
State Taxable Income
On $8,750 annual interest, SPAXX generates $3,938 state-taxable income at 5% state rate.
“On $8,750 of interest, that is roughly $3,938 of state-taxable income from spaxx every year”
FDLXX Tax Advantage
FDLXX's 97% U.S. government securities income means only $263 is state-taxable annually.
“FDLXX listed 97.00% as U.S. government securities income”
Same Expense Ratio
SPAXX and FDLXX share identical 0.42% expense ratios despite different tax treatments.
“Fidelity's June 2026 prospectuses list both at 0.42% (gross and net)”
State Tax Impact
Higher money market yields increase state-taxable portion of SPAXX income by $184 annually.
“The federal funds upper bound sits at 3.75% as of September 15, 2026”
What This Means
SPAXX holders pay $3,700 more in state taxes over 20 years than FDLXX holders for same yield.
“If your cash lives in spaxx and you file in a state with an income tax the question to ask your accountant is how much of last year's spaxx distribution actually qualified for the u.s. government interest exemption in your state”
In short
SPAXX's 45% state-taxable interest costs $3,700 more than FDLXX's 3% taxable portion over 20 years at identical expense ratios.
