# 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.
- Title: SPAXX Pays More State Tax Than FDLXX · Yahoo Finance
- Summary: 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…
- Keywords: spaxx, fdlxx, fidelity, treasury, state tax, money market fund, expense ratio, government fund, business, finance, Pays, More
- Source: Yahoo Finance — https://finance.yahoo.com/markets/options/articles/250-000-sitting-spaxx-pays-171554728.html
- Published: 2026-09-16T17:15:54+00:00
- Read time: 1 min
- Topics: spaxx, fdlxx, fidelity, treasury, state tax, money market fund, expense ratio, government fund, business, 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
## Key takeaway

SPAXX's 45% state-taxable interest costs $3,700 more than FDLXX's 3% taxable portion over 20 years at identical expense ratios.