Riversource Special Tax-Exempt Series Trust – ‘N-30D’ for 12/31/96

As of:  Monday, 2/24/97   ·   For:  12/31/96   ·   Accession #:  820027-97-234   ·   File #:  811-04647

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Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual or Semi-Annual Report Mailed to                56    402K 
                          Shareholders                                           

N-30D
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IDS State                                                                       
Tax-Exempt                                                                      
Funds                                                                           

Tax-exempt funds from the following states:                                     
California                                                                      
Massachusetts                                                                   
Michigan                                                                        
Minnesota                                                                       
New York                                                                        
Ohio                                                                            

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 reduce
state tax,  too,  you can  invest in  municipal  bonds in the state you  reside.
Investments in municipal  bonds are 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.                

Contents                                                                        
From the president                  3                                           
From the portfolio manager          3                                           
Ten largest holdings                6                                           
Financial statements               12                                           
Notes to financial statements      19                                           
Investments in securities          38                                           
Board members and officers         67                                           
IDS mutual funds                   68                                           

To our shareholders                                           

William R. Pearce                                                               
President of the Funds                                                          
(picture of) William Pearce                                                     

From the president                                                              
If you're an  experienced  investor,  you know that the past two years have been
unusually strong ones in many 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  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                                                               

Paul B. Hylle                                                                   
Portfolio manager                                                               
(picture of) Paul Hylle                                                         

From the portfolio manager                                                      

Volatility  continued  to pervade  the bond  market  during the past six months,
reflecting  investors'  shifting  outlooks  regarding  inflation.   Fortunately,
however, the upturns overpowered the downturns, resulting in a productive period
for the IDS State Tax-Exempt Funds.                                             

When the period began last summer,  the bond market was still licking the wounds
it received  during the first  three  months of 1996,  when a rise in  long-term
interest rates,  largely induced by what later proved to be an unfounded fear of
higher inflation, drove bond prices sharply lower.                              

A fall rally                                                                    

By fall, though, the investment  environment had improved,  thanks to reports of
moderate economic growth and stable inflation.  On that news, long-term interest
rates started coming back down,  driving bond prices higher in the process.  The
rally lasted through  November,  before renewed  inflation fears sent the market
into a mild retreat during the final weeks of 1996.                             

The Funds' municipal bond holdings, like all fixed-income investments, benefited
substantially  from the rally.  Keeping a negligible  amount of cash reserves in
the  portfolio  also worked to the Funds'  advantage  during  that time.  Still,
negative  net cash flow into the  municipal  bond market,  a condition  that has
persisted for the past three years,  limited the capital  appreciation the Funds
enjoyed.                                                                        

The supply situation, on the other hand, remained mostly favorable as the number
of bonds "called away" by issuers (taken out of the market because  issuers paid
off the principal ahead of the bonds' maturity dates) exceeded the number of new
bonds coming to market.  In fact,  there are fewer municipal  bonds  outstanding
today than three years ago. The flip side of the call situation,  which has been
in effect  for the past few  years,  is that it  continued  to erode the  Funds'
dividend slightly.  This results from the fact that newly issued bonds don't pay
as much  interest  as the  older  bonds  being  called  away.  Measured  against
comparable municipal bond funds,  however, the dividends provided by these Funds
have held up better  than most.  This has been  achieved by means of a "barbell"
approach  to  credit  quality,   which  is  an  emphasis  on  high-grade   bonds
complemented by middle-grade issues.                                            

State updates                                                                   

In  California,  the  passage of  proposition  218,  which  limits  communities'
financial  flexibility regarding raising taxes, led to slight quality downgrades
of some municipal bonds. Bond performance was tempered a bit in Michigan,  which
experienced an above-average  supply of bonds, and New York, where the potential
for an over-supply  generated by the sale of Long Island  Lighting hung over the
market.  On a general note,  the passage of federal  welfare  reform in 1996 may
ultimately complicate states' financial  situations,  but the effect, if any, on
the overall municipal bond market won't be known for some time.                 

Looking  toward the second half of the fiscal year,  while some  fluctuation  in
bond prices is inevitable, I think conditions may allow for less-dramatic swings
in the  months  ahead.  As always,  the main  bond-market  catalyst  will be the
outlook for inflation, which, given the probability of ongoing moderate economic
growth,  should  increase only  modestly in 1997. If that forecast  proves to be
reasonably accurate,  long-term interest rates would seem unlikely to experience
a  substantial,  sustained  rise. In any event,  I will update you on the Funds'
progress after the fiscal year ends in June.                                    

Paul B. Hylle                                                                   

N-30D
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California                                                                      
Class A                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
-----------------------------                                                   
Dec. 31, 1996           $5.25                                                   
-----------------------------                                                   
June 30, 1996           $5.15                                                   
-----------------------------                                                   
Increase                $0.10                                                   
-----------------------------                                                   

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
-----------------------------                                                   
From income             $0.14                                                   
-----------------------------                                                   
From capital gains      $0.01                                                   
-----------------------------                                                   
Total distributions     $0.15                                                   
-----------------------------                                                   
Total return*           +4.9%**                                                 
-----------------------------                                                   

Class B                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.25                                                    
----------------------------                                                    
June 30, 1996          $5.15                                                    
----------------------------                                                    
Increase               $0.10                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.12                                                    
----------------------------                                                    
From capital gains     $0.01                                                    
----------------------------                                                    
Total distributions    $0.13                                                    
----------------------------                                                    
Total return*          +4.5%**                                                  
----------------------------                                                    

*The prospectus discusses the                                                   
effect of sales charges, if                                                   
any, on the various classes.                                                  

**The total return is a hypothetical                                            
investment in the Fund with all                                             
distributions reinvested.                                                   

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Massachusetts                                                                   
Class A                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.41                                                    
----------------------------                                                    
June 30, 1996          $5.30                                                    
----------------------------                                                    
Increase               $0.11                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.14                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.14                                                    
----------------------------                                                    
Total return*          +4.8%**                                                  
------------------------------                                                  

Class B                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.41                                                    
----------------------------                                                    
June 30, 1996          $5.30                                                    
----------------------------                                                    
Increase               $0.11                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.12                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.12                                                    
----------------------------                                                    
Total return*          +4.4%**                                                  
----------------------------                                                    

*The prospectus discusses the                                               
effect of sales charge, if                                                
any, on the various classes.                                              

**The total return is a hypothetical                                          
investment in the Fund with all                                           
distributions reinvested.                                                 

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Michigan                                                                        
Class A                                                                         
6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.46                                                    
----------------------------                                                    
June 30, 1996          $5.36                                                    
----------------------------                                                    
Increase               $0.10                                                    
----------------------------                                                    
Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.14                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.14                                                    
----------------------------                                                    
Total return*          +4.5%**                                                  
----------------------------                                                    
Class B                                                                         
6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31,  1996         $5.46                                                    
----------------------------                                                    
June 30,  1996         $5.36                                                    
----------------------------                                                    
Increase               $0.10                                                    
----------------------------                                                    
Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.12                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.12                                                    
----------------------------                                                    
Total return*          +4.1%**                                                  
----------------------------                                                    
*The prospectus discusses the effect                                          
of sales charges, if any, on the                                            
the various classes.                                                        
**The total return is a hypothetical                                            
investment in the Fund with all                                             
distributions reinvested.                                                   

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Minnesota                                                                       
Class A                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.29                                                    
----------------------------                                                    
June 30, 1996          $5.20                                                    
----------------------------                                                    
Increase               $0.09                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.15                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.15                                                    
----------------------------                                                    
Total return*          +4.8%**                                                  
----------------------------                                                    

Class B                                                                         
6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.29                                                    
----------------------------                                                    
June 30, 1996          $5.20                                                    
----------------------------                                                    
Increase               $0.09                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.13                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.13                                                    
----------------------------                                                    
Total return*          +4.4%**                                                  
----------------------------                                                    

*The prospectus discusses the effect                                          
of sales charges, if any, on the                                          
various classes.                                                          

**The total return is a hypothetical                                            
investment in the Fund with all                                           
distributions reinvested.                                                 

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New York                                                                        
Class A                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.15                                                    
----------------------------                                                    
June 30, 1996          $5.06                                                    
----------------------------                                                    
Increase               $0.09                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.14                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.14                                                    
----------------------------                                                    
Total return*          +4.5%**                                                  
----------------------------                                                    

Class B                                                                         

6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.15                                                    
----------------------------                                                    
June 30, 1996          $5.06                                                    
----------------------------                                                    
Increase               $0.09                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996- Dec. 31, 1996                                                     
----------------------------                                                    
From income            $0.12                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.12                                                    
-----------------------------                                                   
Total return*          +4.1%**                                                  
-------------------------------                                                 

*The prospectus discusses the                                                   
effect of sales charges, if                                                   
any, on the various classes.                                                  

**The total return is a hypothetical                                            
investment in the Fund with all                                             
distributions reinvested.                                                   

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Ohio                                                                            
Class A                                                                         
6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.39                                                    
----------------------------                                                    
June 30, 1996          $5.28                                                    
----------------------------                                                    
Increase               $0.11                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.14                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.14                                                    
----------------------------                                                    
Total return*          +4.7%**                                                  
----------------------------                                                    

Class B                                                                         
6-month performance                                                             
(All figures per share)                                                         

Net asset value (NAV)                                                           
----------------------------                                                    
Dec. 31, 1996          $5.39                                                    
----------------------------                                                    
June 30, 1996          $5.28                                                    
----------------------------                                                    
Increase               $0.11                                                    
----------------------------                                                    

Distributions                                                                   
July 1, 1996 - Dec. 31, 1996                                                    
----------------------------                                                    
From income            $0.12                                                    
----------------------------                                                    
From capital gains     $  --                                                    
----------------------------                                                    
Total distributions    $0.12                                                    
----------------------------                                                    
Total return*          +4.4%**                                                  
----------------------------                                                    

*The prospectus discusses the effect                                          
of sales charges, if any, on the                                          
various classes.                                                          

**The total return is a hypothetical                                            
investment in the Fund with all                                           
distributions reinvested.                                                 

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The Fund's ten largest holdings                                                 
IDS California Tax-Exempt Fund                                                  

(pie chart) The ten holdings listed here make up 26.80% of the Fund's net assets
--------------------------------------------------------------------------------
                                               Percent                   Value
                                 (of Fund's net assets)  (as of Dec. 31, 1996)
--------------------------------------------------------------------------------

Anaheim Public Finance Authority Revenue Bonds                                  
2nd Series Electric Utilities San Juan                                          
5.75% 2022                                        4.59%             $11,156,721 

Sacramento Municipal Utility District Series R                                  
6.00% 2015-2017                                   3.09                7,501,020 

Long Beach Harbor Revenue Bonds Series 1989A A.M.T.                             
7.25% 2019                                        3.04                7,390,390 

Los Angeles Department of Water & Power Electric Plant                          
Revenue Bonds Series 1990                                                       
7.125% 2030                                       2.95                7,156,955 

Statewide Community Development Authority Revenue                               
Certificate of Participation St. Joseph Health System Group                     
6.50% 2015                                        2.43                5,902,765 

Los Angeles Convention & Exhibition Center                                      
Pre-Refunded Certificate of Participation Series 1989A                          
7.00% 2020                                        2.24                5,435,900 

University of Southern California Educational Facilities Authority              
Pre-Refunded Revenue Bonds Series 1989B                                         
6.75% 2015                                        2.22                5,397,650 

Statewide Community Development Authority Health Facilities                     
Revenue Bonds Unihealth America Series 1993A Inverse Floater                    
7.519% 2011                                       2.18                5,300,000 

San Diego Regional Transportation Commission Sales Tax                          
Pre-Refunded Revenue Bonds Limited Tax Series 1989A                             
6.25% 2008                                        2.17                5,274,156 

Rancho Mirage Joint Powers Finance Authority Certificate of Participation       
Eisenhower Memorial Hospital                                                    
7.00% 2022                                        1.89                4,601,135 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T.).                                                           

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The Fund's ten largest holdings                                                 
IDS Massachusetts Tax-Exempt Fund                                               

The ten holdings listed here make up 26.98% of the Fund's net assets            
--------------------------------------------------------------------------------

                                               Percent                   Value
                               (of  Fund's net  assets) (as  of Dec. 31, 1996)
--------------------------------------------------------------------------------

Boston City Hospital Refunding Revenue Bonds                                    
Series B                                                                        
5.75% 2023                                        3.84%              $2,901,450 

Health & Educational Facilities Authority                                       
Revenue Bonds Suffolk University Series B                                       
6.35% 2022                                        3.48                2,627,035 

Health & Educational Facilities Authority                                       
Revenue Bonds Cape Cod Health System Series A                                   
5.25% 2021                                        3.09                2,329,250 

Health & Educational Facilities Authority                                       
Revenue Bonds Boston College Series J                                           
6.625% 2021                                       2.88                2,174,220 

Industrial Finance Agency Pollution Control                                     
Refunding Revenue Bonds Eastern Edison Series 1993                              
5.875% 2008                                       2.60                1,961,580 

Health & Educational Facilities Authority                                       
Revenue Bonds Charlton Memorial Series 1991B                                    
7.25% 2013                                        2.51                1,892,223 

Industrial Finance Agency Resource Recovery                                     
Revenue Bonds SEMASS Series 1991A                                               
9.00% 2015                                        2.21                1,671,120 

Bay Transportation Authority General Transportation System                      
Refunding Bonds Series 1992B                                                    
6.20% 2016                                        2.16                1,627,020 

Municipal Wholesale Electric Power Supply System                                
Refunding Revenue Bonds Series B                                                
4.75% 2011                                        2.13                1,605,258 

Municipal Wholesale Electric Power Supply System                                
Pre-Refunded Revenue Bonds Series 1992B                                         
6.75% 2017                                        2.08                1,566,822 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T.).                                                           

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The Fund's ten largest holdings                                                 
IDS Michigan Tax-Exempt Fund                                                    

(pie chart) The ten holdings listed here make up 24.20% of the Fund's net assets
--------------------------------------------------------------------------------

                                               Percent                   Value
                                 (of Fund's net assets)    (as of Dec. 31, 1996)
--------------------------------------------------------------------------------
Romulus Township School District Unlimited Tax                                  
General Obligation Refunding Bonds                                              
5.75% 2022                                        3.07%              $2,512,925 

State Building Authority Refunding Revenue Bonds                                
Series 1991I                                                                    
6.25% 2020                                        2.78                2,277,990 

State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds            
McLaren Obligated Group Series 1991A                                            
7.50% 2021                                        2.44                2,000,233 

Detroit Sewer Disposal Revenue Bonds                                            
5.70% 2023                                        2.40                1,967,780 

Monroe County Pollution Control Revenue Bonds                                   
Detroit Edison Fermi 2 Plants Series CC A.M.T.                                  
7.50% 2019                                        2.36                1,932,420 

Grand Ledge Public Schools Unlimited Tax General Obligation                     
Refunding Bonds Counties of Eaton, Clinton & Ionia Series 1995                  
5.375% 2024                                       2.35                1,926,400 

State Strategic Fund Limited Tax Obligation                                     
Refunding Revenue Bonds Ford Motor Series 1991A                                 
7.10% 2006                                        2.31                1,890,669 

Willow Run Community Schools Unlimited General Obligation Refunding             
Bonds Series 1996                                                               
5.00% 2016                                        2.29                1,872,680 

Battle Creek Water Supply System                                                
Pre-Refunded Revenue Bonds Series 1990B                                         
6.375% 2008-2010                                  2.12                1,733,234 

Mason Public Schools Unlimited Tax General Obligation Bonds                     
County of Ingham School Building & Site Bonds Series 1995                       
5.40% 2021                                        2.08                1,704,314 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T).                                                            

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The Fund's ten largest holdings                                                 
IDS Minnesota Tax-Exempt Fund                                                   

(pie chart) The ten holdings listed here make up 21.42% of the Fund's net assets
--------------------------------------------------------------------------------
                                               Percent                   Value
                                 (of Fund's net assets)    (as of Dec. 31, 1996)
--------------------------------------------------------------------------------
Minneapolis & St. Paul Housing & Redevelopment Authority                        
Health Care System Revenue Bonds                                                
Healthspan Series 1993                                                          
4.75% 2018                                        2.93%             $11,861,370 

St. Paul & Minneapolis Housing & Redevelopment Authority                        
Health Care Facility Revenue Bonds                                              
Group Health Plan Series 1992                                                   
6.75% 2013                                        2.81               11,395,755 

State General Obligation Various Purpose                                        
Pre-Refunded Bonds Series 1991                                                  
6.70% 2011                                        2.16                8,742,640 

State General Obligation Various Purpose                                        
Pre-Refunded Bonds Series 1990                                                  
7.00% 2009                                        2.11                8,543,862 

Anoka County General Obligation Capital Improvement                             
Revenue Bonds Series 1989B                                                      
7.00% 2007-2010                                   2.05                8,329,374 

State University Board of Regents                                               
General Obligation Bonds Series 1996A                                           
5.50% 2021                                        1.94                7,862,640 

Hennepin County Lease Revenue                                                   
Certificate of Participation Series 1991                                        
6.80% 2017                                        1.94                7,856,390 

Western Minnesota Municipal Power Agency                                        
Supply Refunding Revenue Bonds Series 1987A                                     
7.00% 2013                                        1.84                7,446,000 

St. Paul Housing & Redevelopment Authority Sales Tax                            
Revenue Bonds Civic Center                                                      
5.55% 2023                                        1.83                7,400,475 

Edina Multi-family Housing Revenue Bonds                                        
Walker Assisted Living Series 1991                                              
9.00% 2031                                        1.81                7,352,044 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T.).                                                           

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The Fund's ten largest holdings                                                 
IDS New York Tax-Exempt Fund                                                    

(pie chart) The ten holdings listed here make up 34.31% of the Fund's net assets
--------------------------------------------------------------------------------
                                               Percent                   Value
                                 (of Fund's net assets)    (as of Dec. 31, 1996)
--------------------------------------------------------------------------------

State Energy Research & Development Authority                                   
Electric Facility Revenue Bonds Consolidated Edison                             
Series 1990A A.M.T.                                                             
7.50% 2025                                        4.51%              $5,343,050 

State Urban Development Correction Facility                                     
Pre-Refunded Revenue Bonds Series 1                                             
7.50% 2020                                        4.21                4,991,265 

United Nations Development Senior Lien                                          
Refunding Revenue Bonds Series 1992A                                            
6.00% 2026                                        3.83                4,535,730 

State Local Government Assistance Pre-Refunded Bonds                            
Series 1991A                                                                    
7.00% 2016                                        3.77                4,470,240 

State Mortgage Agency Homeowner Mortgage Revenue Bonds                          
Series TT                                                                       
7.50% 2015                                        3.60                4,266,760 

Battery Park City Authority                                                     
Senior Refunding Revenue Bonds Series 1993A                                     
5.25% 2017                                        3.13                3,712,800 

State Dormitory Authority City University System                                
Pre-Refunded Revenue Bonds                                                      
8.125% 2017                                       2.99                3,545,112 

Triborough Bridge & Tunnel Authority                                            
General Purpose Pre-Refunded Revenue Bonds Series S                             
7.00% 2021                                        2.80                3,324,540 

State Environmental Facility State Water & Pollution Control                    
Revolving Fund Revenue Bonds New York City                                      
Municipal Water Finance Authority Series 1990A                                  
7.50% 2012                                        2.79                3,305,430 

State Mortgage Agency Homeowner Mortgage Revenue Bonds                          
Series 27                                                                       
6.90% 2015                                        2.68                3,181,770 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T.).                                                           

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The Fund's ten largest holdings                                                 
IDS Ohio Tax-Exempt Fund                                                        

(pie chart)The ten holdings listed here make up 26.39% of the Funds's net assets
--------------------------------------------------------------------------------
                                               Percent                   Value
                                 (of Fund's net assets)    (as of Dec. 31, 1996)
--------------------------------------------------------------------------------

Lakota Local School District Unlimited Tax Improvement                          
General Obligation Bonds                                                        
6.25% 2014                                        2.99%              $2,134,980 

State Air Quality Development Authority                                         
Refunding Revenue Bonds Series 1994 A.M.T.                                      
6.375% 2029                                       2.98                2,130,500 

Erie County Hospital Improvement Refunding Revenue Bonds                        
Firelands Community Hospital Series 1992                                        
6.75% 2015                                        2.96                2,113,920 

Lorain County Hospital Facilities Refunding Revenue Bonds                       
EMH Regional Medical Center                                                     
Series 1995                                                                     
5.375% 2021                                       2.71                1,939,860 

State Municipal Electric Generation Agency Joint Venture #5                     
Revenue Bonds                                                                   
5.375% 2024                                       2.68                1,918,640 

State Valley School District School Improvement                                 
Unlimited Tax General Obligation Bonds                                          
Counties of Adams & Highland Series 1995                                        
5.25% 2021                                        2.67                1,914,220 

Butler County Hospital Facility Improvement                                     
Refunding Revenue Bonds                                                         
7.50% 2010                                        2.62                1,874,442 

Franklin County Convention Facilities Authority                                 
Tax & Lease Revenue Anticipation                                                
Pre-Refunded Bonds                                                              
7.00% 2019                                        2.34                1,671,615 

North Olmstead County                                                           
Limited General Obligation Bonds                                                
Series 1996                                                                     
5.00% 2016-2021                                   2.24                1,598,792 

State Housing Finance Agency Mortgage Revenue Bonds                             
Aristrocrat South Board & Care Series 1991A                                     
7.30% 2031                                        2.20                1,569,915 

Note:  Certain of the Fund's investment income may be subject to the Alternative
Minimum Tax (A.M.T.).                                                           

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Statements of assets and liabilities                                                                       
IDS California Tax-Exempt Trust                                                                            
IDS Special Tax-Exempt Series Trust                                                                        
Dec. 31, 1996  (Unaudited)                                                                                 
---------------------------------------------------------------------------------------------------------- 

Assets                                                                                                     
---------------------------------------------------------------------------------------------------------- 

                                                             California    Massachusetts          Michigan 
                                                             Tax-Exempt       Tax-Exempt        Tax-Exempt 
                                                                   Fund             Fund              Fund 
---------------------------------------------------------------------------------------------------------- 
                                                                                                           
Investments in securities, at value (Note 1)                                                               
   (identified cost $219,816,196, $69,382,326                                                              
   and $74,581,261)                                        $239,704,961      $73,969,570       $80,651,428 
Cash in bank on demand deposit                                       --           15,919            24,186 
Accrued interest receivable                                   4,517,101        1,578,749         1,332,185 
---------------------------------------------------------------------------------------------------------- 
Total assets                                                244,222,062       75,564,238        82,007,799 
---------------------------------------------------------------------------------------------------------- 

Liabilities                                                                                                
---------------------------------------------------------------------------------------------------------- 
Disbursements in excess of cash on demand deposit               918,530               --                -- 
Dividends payable to shareholders                               172,337           53,404            57,965 
Payable for investment securities purchased                      36,000           10,125            12,438 
Accrued investment management services fee                        3,137              970             1,053 
Accrued distribution fee                                            166              140                63 
Accrued service fee                                               1,168              361               392 
Accrued transfer agency fee                                         210              100                95 
Accrued administrative services fee                                 267               83                89 
Other accrued expenses                                          102,666           42,804            40,968 
---------------------------------------------------------------------------------------------------------- 
Total liabilities                                             1,234,481          107,987           113,063 
---------------------------------------------------------------------------------------------------------- 
Net assets applicable to outstanding shares                $242,987,581      $75,456,251       $81,894,736 
---------------------------------------------------------------------------------------------------------- 

Represented by                                                                                             
---------------------------------------------------------------------------------------------------------- 
Shares of beneficial interest -- $.01 par value,                                                           
   unlimited number of shares authorized                       $462,907         $139,506      $    150,038 
Additional paid-in-capital                                  230,024,406       72,014,595        77,161,549 
Excess of distributions over net investment income             (123,793)              --            (8,339)
Accumulated net realized loss (Notes 1 and 6)                (7,298,860)      (1,294,656)       (1,489,147)
Unrealized appreciation (Note 5)                             19,922,921        4,596,806         6,080,635 
---------------------------------------------------------------------------------------------------------- 
Total -- representing net assets applicable                                                                
  to outstanding shares                                    $242,987,581      $75,456,251       $81,894,736 
---------------------------------------------------------------------------------------------------------- 
Net assets applicable to outstanding shares:                                                               
                      Class A                              $234,902,194      $68,628,996       $78,817,975 
                      Class B                                $8,085,387       $6,827,255      $  3,076,761 
Outstanding shares of beneficial interest:                                                                 
                      Class A shares                         44,750,011       12,688,245        14,440,084 
                      Class B shares                          1,540,659        1,262,330           563,686 
Net asset value per share:                                                                                 
                      Class A                              $       5.25      $      5.41      $       5.46 
                      Class B                              $       5.25      $      5.41      $       5.46 

See accompanying notes to financial statements.                                                            

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Statements of assets and liabilities                                                                       
IDS California Tax-Exempt Trust                                                                            
IDS Special Tax-Exempt Series Trust                                                                        
Dec. 31, 1996 (Unaudited)                                                                                  
---------------------------------------------------------------------------------------------------------- 

Assets                                                                                                     
---------------------------------------------------------------------------------------------------------- 
                                                              Minnesota         New York              Ohio 
                                                             Tax-Exempt       Tax-Exempt        Tax-Exempt 
                                                                   Fund             Fund              Fund 
---------------------------------------------------------------------------------------------------------- 
Investments in securities, at value (N,ote 1)                                                              
   (identified cost $381,356,749, $108,357,131                                                             
   and $65,791,862)                                        $405,409,640     $116,433,107       $70,584,764 
Accrued interest receivable                                   8,400,999        2,399,515         1,027,431 
Receivable for investment securities sold                       270,000               --                -- 
---------------------------------------------------------------------------------------------------------- 
Total assets                                                414,080,639      118,832,622        71,612,195 
---------------------------------------------------------------------------------------------------------- 

Liabilities                                                                                                
---------------------------------------------------------------------------------------------------------- 
Disbursements in excess of cash on demand deposit               509,675           76,059            40,844 
Dividends payable to shareholders                               315,565           87,972            51,985 
Payable for investment securities purchased                   7,913,237           70,875            10,125 
Accrued investment management services fee                        5,112            1,526               921 
Accrued distribution fee                                            401              126                59 
Accrued service fee                                               1,943              568               343 
Accrued transfer agency fee                                         499              154                90 
Accrued administrative services fee                                 423              130                78 
Other accrued expenses                                           86,084           30,390            16,656 
---------------------------------------------------------------------------------------------------------- 
Total liabilities                                             8,832,939          267,800           121,101 
---------------------------------------------------------------------------------------------------------- 
Net assets applicable to outstanding shares                $405,247,700     $118,564,822       $71,491,094 
---------------------------------------------------------------------------------------------------------- 

Represented by                                                                                             
---------------------------------------------------------------------------------------------------------- 
Shares of beneficial interest -- $.01 par value,                                                           
   unlimited number of shares authorized                   $    766,006     $    230,406       $   132,724 
Additional paid-in-capital                                  390,678,374      113,863,975        68,396,159 
Excess of distributions over net investment income               (5,705)          (1,147)           (7,624)
Accumulated net realized loss (Notes 1 and 6)               (10,298,053)      (3,682,420)       (1,832,629)
Unrealized appreciation (Note 5)                             24,107,078        8,154,008         4,802,464 
---------------------------------------------------------------------------------------------------------- 
Total -- representing net assets applicable                                                                
  to outstanding shares                                    $405,247,700     $118,564,822       $71,491,094 
---------------------------------------------------------------------------------------------------------- 
Net assets applicable to outstanding shares:                                                               
                      Class A                              $385,690,744     $112,418,285       $68,636,389 
                      Class B                              $ 19,556,956     $  6,146,537       $ 2,854,705 
Outstanding shares of beneficial interest:                                                                 
                      Class A shares                         72,903,687       21,846,198        12,742,435 
                      Class B shares                          3,696,873        1,194,397           529,971 
Net asset value per share:                                                                                 
                      Class A                              $       5.29     $       5.15       $      5.39 
                      Class B                              $       5.29     $       5.15       $      5.39 
See accompanying notes to financial statements.                                                            

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Statements of operations                                                                                   
IDS California Tax-Exempt Trust                                                                            
IDS Special Tax-Exempt Series Trust                                                                        
Six months ended Dec. 31, 1996 (Unaudited)                                                                 
---------------------------------------------------------------------------------------------------------- 

Investment income                                                                                          
---------------------------------------------------------------------------------------------------------- 
                                                             California    Massachusetts          Michigan 
                                                             Tax-Exempt       Tax-Exempt        Tax-Exempt 
                                                                   Fund             Fund              Fund 
---------------------------------------------------------------------------------------------------------- 
Income:                                                                                                    
Interest                                                     $7,565,108       $2,305,701        $2,564,345 
---------------------------------------------------------------------------------------------------------- 
Expenses (Note 2)                                                                                          
Investment management services fee                              576,991          176,929           194,011 
Distribution fee -- Class B                                      27,921           22,609            10,784 
Transfer agency fee                                              46,921           22,765            20,793 
Incremental transfer agency fee -- Class B                          156              131                67 
Service fee                                                                                                
  Class A                                                       205,540           60,023            68,607 
  Class B                                                         6,301            5,276             2,440 
Administrative services fee                                      49,106           14,077            16,512 
Compensation of board members                                    11,419            2,072             1,848 
Compensation of officers                                             --               --               305 
Custodian fees                                                   17,879            2,778               828 
Postage                                                          57,735            8,982             3,176 
Registration fees                                                 7,544           27,415            24,567 
Reports to shareholders                                          31,341            7,426             5,752 
Audit fees                                                        8,500            7,750             7,750 
Administrative                                                       --                5               426 
Other                                                                --            3,476             5,757 
---------------------------------------------------------------------------------------------------------- 
Total expenses                                                1,047,354          361,714           363,623 
  Earnings credits on cash balances (Note 2)                    (21,895)          (5,037)           (1,875)
---------------------------------------------------------------------------------------------------------- 
Total net expenses                                            1,025,459          356,677           361,748 
---------------------------------------------------------------------------------------------------------- 
Investment income -- net                                      6,539,649        1,949,024         2,202,597 
---------------------------------------------------------------------------------------------------------- 

Realized and unrealized gain (loss) -- net                                                                 
---------------------------------------------------------------------------------------------------------- 
Net realized gain (loss) on security transactions (Note 3)      436,799          (41,280)         (149,505)
Net realized gain on financial futures contracts                786,525          213,672           242,354 
---------------------------------------------------------------------------------------------------------- 
Net realized gain on investments                              1,223,324          172,392            92,849 
Net change in unrealized appreciation or depreciation         3,959,476        1,338,480         1,352,535 
---------------------------------------------------------------------------------------------------------- 
Net gain on investments                                       5,182,800        1,510,872         1,445,384 
---------------------------------------------------------------------------------------------------------- 
Net increase in net assets resulting from operations        $11,722,449       $3,459,896        $3,647,981 
---------------------------------------------------------------------------------------------------------- 
See accompanying notes to financial statements.                                                            

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Statements of operations                                                                                   
IDS California Tax-Exempt Trust                                                                            
IDS Special Tax-Exempt Series Trust                                                                        
Six months ended Dec. 31, 1996 (Unaudited)                                                                 
---------------------------------------------------------------------------------------------------------- 

Investment income                                                                                          
---------------------------------------------------------------------------------------------------------- 

                                                              Minnesota         New York              Ohio 
                                                             Tax-Exempt       Tax-Exempt        Tax-Exempt 
                                                                   Fund             Fund              Fund 
---------------------------------------------------------------------------------------------------------- 
Income:                                                                                                    
Interest                                                    $13,548,158       $3,836,950        $2,295,454 
---------------------------------------------------------------------------------------------------------- 
Expenses (Note 2):                                                                                         
Investment management services fee                              949,008          285,162           172,973 
Distribution fee -- Class B                                      67,255           20,753             9,075 
Transfer agency fee                                             112,339           33,775            19,828 
Incremental transfer agency fee -- Class B                          403              134                67 
Service fee                                                                                                
  Class A                                                       342,114          100,334            61,350 
  Class B                                                        15,682            4,840             2,117 
Administrative services fee                                      78,495           24,269            14,721 
Compensation of board members                                     2,125            3,287             2,211 
Compensation of officers                                          1,395              663               315 
Custodian fees                                                   45,213            8,498             5,095 
Postage                                                          18,057            4,720             2,392 
Registration fees                                                 7,375           13,518            12,967 
Reports to shareholders                                          20,591            4,679             4,683 
Audit fees                                                        9,000            8,500             7,750 
Administrative                                                    1,091              583             1,513 
Other                                                             1,071            4,608             7,585 
---------------------------------------------------------------------------------------------------------- 
Total expenses                                                1,671,214          518,323           324,642 
  Earnings credits on cash balances (Note 2)                    (67,538)         (11,763)           (7,240)
---------------------------------------------------------------------------------------------------------- 
Total net expenses                                            1,603,676          506,560           317,402 
---------------------------------------------------------------------------------------------------------- 
Investment income -- net                                     11,944,482        3,330,390         1,978,052 
---------------------------------------------------------------------------------------------------------- 

Realized and unrealized gain (loss) -- net                                                                 
---------------------------------------------------------------------------------------------------------- 
Net realized gain (loss) on security transactions (Note 3)     (369,698)          56,227            98,782 
Net realized gain on financial futures contracts              1,282,238          598,533           227,125 
---------------------------------------------------------------------------------------------------------- 
Net realized gain on investments                                912,540          654,760           325,907 
Net change in unrealized appreciation or depreciation         6,466,361        1,289,554         1,076,588 
---------------------------------------------------------------------------------------------------------- 
Net gain on investments                                       7,378,901        1,944,314         1,402,495 
---------------------------------------------------------------------------------------------------------- 
Net increase in net assets resulting from operations        $19,323,383       $5,274,704        $3,380,547 
---------------------------------------------------------------------------------------------------------- 
See accompanying notes to financial statements.                                                            

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Financial statements                                                                                         

Statements of changes in net assets                                                                          
IDS California Tax-Exempt Trust                                                                              
IDS Special Tax-Exempt Series Trust                                                                          
------------------------------------------------------------------------------------------------------------ 

Operations and distributions                 Dec. 31, 1996  June 30, 1996       Dec. 31, 1996  June 30, 1996 
------------------------------------------------------------------------------------------------------------ 
                                                       California                        Massachusetts       
                                                     Tax-Exempt Fund                    Tax-Exempt Fund      
                                          Six months ended     Year ended     Six months ended    Year ended 
                                               (Unaudited)                         (Unaudited)               
------------------------------------------------------------------------------------------------------------ 
                                                                                                             
Investment income -- net                        $6,539,649    $13,093,048           $1,949,024    $3,831,143 
Net realized gain on investments                 1,223,324        553,259              172,392        95,554 
Net change in unrealized appreciation                                                                        
   or depreciation                               3,959,476        323,151            1,338,480       202,491 
------------------------------------------------------------------------------------------------------------ 
Net increase in net assets resulting                                                                         
   from operations                              11,722,449     13,969,458            3,459,896     4,129,188 
------------------------------------------------------------------------------------------------------------ 
Distributions to shareholders from:                                                                          
   Net investment income                                                                                     
     Class A                                    (6,488,949)   (12,910,408)          (1,819,252)   (3,652,208)
     Class B                                      (175,747)      (184,985)            (136,088)     (172,619)
Net realized gain on securities                                                                              
     Class A                                      (396,342)    (1,353,180)                  --            -- 
     Class B                                       (13,517)       (20,647)                  --            -- 
------------------------------------------------------------------------------------------------------------ 
Total distributions                             (7,074,555)   (14,469,220)          (1,955,340)   (3,824,827)
------------------------------------------------------------------------------------------------------------ 
Share transactions (Note 4)                                                                                  
------------------------------------------------------------------------------------------------------------ 
Proceeds from sales                                                                                          
   Class A shares (Note 2)                       9,113,768     23,553,539            3,724,627    11,006,959 
   Class B shares                                2,025,504      5,187,208            1,553,832     4,389,565 
Reinvestment of distributions at net asset value                                                             
   Class A shares                                4,731,300     10,071,476            1,382,047     2,835,422 
   Class B shares                                  155,076        184,290              116,639       149,356 
Payments for redemptions                                                                                     
   Class A shares                              (17,567,135)   (38,384,549)          (5,630,496)  (14,679,805)
   Class B shares (Note 2)                        (633,516)      (960,392)            (522,979)     (790,581)
------------------------------------------------------------------------------------------------------------ 
Increase (decrease) in net assets from                                                                       
   share transactions                           (2,175,003)      (348,428)             623,670     2,910,916 
------------------------------------------------------------------------------------------------------------ 
Total increase (decrease) in net assets          2,472,891       (848,190)           2,128,226     3,215,277 
Net assets at beginning of period              240,514,690    241,362,880           73,328,025    70,112,748 
------------------------------------------------------------------------------------------------------------ 
Net assets at end of period                                                                                  
    (including undistributed (excess of                                                                      
    distributions over) net investment income                                                                
    of $(123,793) and $1,254 for IDS California, and                                                         
    $0 and $6,316 for IDS Massachuesetts)     $242,987,581   $240,514,690          $75,456,251   $73,328,025 
------------------------------------------------------------------------------------------------------------ 
See accompanying notes to financial statements.                                                              

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Statements of changes in net assets                                                                          
IDS California Tax-Exempt Trust                                                                              
IDS Special Tax-Exempt Series Trust                                                                          
------------------------------------------------------------------------------------------------------------ 

Operations and distributions                 Dec. 31, 1996  June 30, 1996       Dec. 31, 1996  June 30, 1996 
------------------------------------------------------------------------------------------------------------ 
                                                        Michigan                           Minnesota         
                                                     Tax-Exempt Fund                    Tax-Exempt Fund      
                                          Six months ended     Year ended     Six months ended    Year ended 
                                               (Unaudited)                         (Unaudited)               
-------------------------------------------------------------------------------------------------------------
Investment income -- net                       $ 2,202,597    $ 4,347,534          $11,944,482   $23,264,721 
Net realized gain on investments                    92,849        316,845              912,540       512,083 
Net change in unrealized appreciation                                                                        
   or depreciation                               1,352,535        274,473            6,466,361        20,022 
------------------------------------------------------------------------------------------------------------ 
Net increase in net assets resulting                                                                         
   from operations                               3,647,981      4,938,852           19,323,383    23,796,826 
------------------------------------------------------------------------------------------------------------ 
Distributions to shareholders from:                                                                          
   Net investment income                                                                                     
     Class A                                    (2,140,334)    (4,267,967)         (11,505,726)  (22,792,680)
     Class B                                       (67,486)       (83,171)            (456,412)     (470,510)
Net realized gain on securities                                                                              
     Class A                                       (22,580)    (1,011,054)                  --      (300,981)
     Class B                                          (286)       (21,404)                  --        (6,713)
-------------------------------------------------------------------------------------------------------------
Total distributions                            (2,230,686)    (5,383,596)         (11,962,138)  (23,570,884) 
-------------------------------------------------------------------------------------------------------------
Share transactions (Note 4)                                                                                  
-------------------------------------------------------------------------------------------------------------
Proceeds from sales                                                                                          
   Class A shares (Note 2)                       2,707,689      7,791,545           17,769,266    43,579,588 
   Class B shares                                  612,282      1,729,504            3,820,123    12,784,665 
Reinvestment of distributions at net asset value                                                             
   Class A shares                                1,550,441      3,972,959            8,889,287    18,480,882 
   Class B shares                                   50,401         85,004              358,912       401,374 
Payments for redemptions                                                                                     
   Class A shares                               (5,886,022)    (9,793,095)         (40,984,317)  (72,296,842)
   Class B shares (Note 2)                        (230,248)      (166,982)          (1,022,779)   (1,011,844)
-------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from                                                                       
   share transactions                           (1,195,457)     3,618,935          (11,169,508)    1,937,823 
-------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets            221,838      3,174,191           (3,808,263)    2,163,765 
Net assets at beginning of period               81,672,898     78,498,707          409,055,963   406,892,198 
-------------------------------------------------------------------------------------------------------------
Net assets at end of period                                                                                  
 (including undistributed (excess of                                                                         
 distributions over) net investment income                                                                   
 of $(8,339) and $(3,116) for IDS Michigan, and                                                              
 $(5,705) and $11,951 for IDS Minnesota)       $81,894,736    $81,672,898         $405,247,700  $409,055,963 
-------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.                                                              

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Statements of changes in net assets                                                                          
IDS California Tax-Exempt Trust                                                                              
IDS Special Tax-Exempt Series Trust                                                                          
------------------------------------------------------------------------------------------------------------ 

Operations and distributions                 Dec. 31, 1996  June 30, 1996       Dec. 31, 1996  June 30, 1996 
------------------------------------------------------------------------------------------------------------ 
                                                        New York                             Ohio            
                                                     Tax-Exempt Fund                    Tax-Exempt Fund      
                                          Six months ended     Year ended     Six months ended    Year ended 
                                               (Unaudited)                         (Unaudited)               
------------------------------------------------------------------------------------------------------------ 
Investment income -- net                        $3,330,390     $6,762,893           $1,978,052    $4,040,372 
Net realized gain (loss) on investments            654,760       (312,952)             325,907     (450,527) 
Net change in unrealized appreciation                                                                        
   or depreciation                               1,289,554       (271,393)           1,076,588       579,615 
------------------------------------------------------------------------------------------------------------ 
Net increase in net assets resulting                                                                         
   from operations                               5,274,704      6,178,548            3,380,547     4,169,460 
------------------------------------------------------------------------------------------------------------ 
Distributions to shareholders from:                                                                          
   Net investment income                                                                                     
     Class A                                    (3,199,193)    (6,587,853)          (1,929,625)   (3,934,670)
     Class B                                      (132,333)      (175,051)             (56,746)      (69,847)
    Net realized gain on securities                                                                          
     Class A                                            --             --               (3,182)     (133,992)
     Class B                                            --             --                 (133)       (3,014)
-------------------------------------------------------------------------------------------------------------
Total distributions                             (3,331,526)    (6,762,904)          (1,989,686)   (4,141,523)
-------------------------------------------------------------------------------------------------------------
Share transactions (Note 4)                                                                                  
-------------------------------------------------------------------------------------------------------------
Proceeds from sales                                                                                          
   Class A shares (Note 2)                       5,029,276      9,808,292            2,718,147     6,884,856 
   Class B shares                                1,197,827      3,827,013              969,076     1,761,407 
Reinvestment of distributions at net asset value                                                             
   Class A shares                                2,404,775      5,179,063            1,463,403     3,192,485 
   Class B shares                                  111,961        158,781               45,252        64,381 
Payments for redemptions                                                                                     
   Class A shares                              (12,150,324)   (18,878,694)          (8,519,690)  (11,876,308)
   Class B shares (Note 2)                        (203,351)      (862,141)            (394,235)     (316,974)
-------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from                                                                       
   share transactions                           (3,609,836)      (767,686)          (3,718,047)     (290,153)
-------------------------------------------------------------------------------------------------------------
Total decrease in net assets                    (1,666,658)    (1,352,042)          (2,327,186)     (262,216)
Net assets at beginning of period              120,231,480    121,583,522           73,818,280    74,080,496 
-------------------------------------------------------------------------------------------------------------
Net assets at end of period                                                                                  
 (including undistributed (excess of                                                                         
 distributions over) net investment income                                                                   
 of $(1,147)and $(11) for IDS New York, and                                                                  
    $(7,624) and $695 for IDS Ohio)           $118,564,822   $120,231,480          $71,491,094   $73,818,280 
-------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.                                                              

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Notes to financial statements                                                   

IDS California Tax-Exempt Trust                                                 
IDS Special Tax-Exempt Series Trust                                             
(Unaudited as to Dec. 31, 1996)                                                 
--------------------------------------------------------------------------------
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 may be subject to a contingent    
deferred sales charge. Class B shares automatically convert to Class A after    
eight years.                                                                    

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.                                             

The significant accounting policies followed by the Funds are summarized as     
follows:                                                                        

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.            

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, the Funds may buy or 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 the   
Funds give up the opportunity for profit if the market price of the security    
increases. The risk in writing a put option is that the Funds 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 the Funds pay a premium whether or not the     
option is exercised. The Funds also have the additional risk of not being able  
to enter into a closing transaction if a liquid secondary market does not exist.
The Funds also may write over-the-counter options where the completion of the   
obligation is dependent upon the credit standing of the other party.            

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.                                         

Futures transactions                                                            
In order to gain exposure to or protect itself from changes in the market, the  
Funds may buy or 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.           

Upon entering into a futures contract, the Funds may be 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 the Funds each day. The variation margin payments are equal 
to the daily changes in the contract value and are recorded as unrealized gains 
and losses. The Funds recognize a realized gain or loss when the contract is    
closed or expires.                                                              

Federal income taxes                                                            
Since each Fund intends 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. Each Fund is treated as a separate entity for federal income tax      
purposes.                                                                       

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. The effect on dividend        
distributions of certain book-to-tax differences is presented as "excess        
distributions" in the statement of changes in net assets. 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 Funds.                                                     

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 amortization of premium and discount on a level
yield basis, is accrued daily.                                                  
--------------------------------------------------------------------------------
2. Expenses and sales charges                                                   

Effective  March 20, 1995,  each Fund  entered  into an agreement  with AEFC for
managing  its  portfolio,  providing  administrative  services  and  serving  as
transfer  agent.  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                                                       

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.                                     

Sales  charges  received  by  American  Express  Financial   Advisors  Inc.  for
distributing  the Funds'  shares for the period  ended  Dec.  31,  1996,  are as
follows:                                                                        
Fund                               Class A             Class B
 ---------------------------------------------------------------
IDS California                    $195,690              $5,131
IDS Massachusetts                  123,567               5,087
IDS Michigan                        69,384               2,760
IDS Minnesota                      391,935              14,229
IDS New York                       138,040               1,535
IDS Ohio                            57,478               2,675

During the period ended Dec. 31, 1996, the Funds' custodian and transfer agency 
fees were reduced as a result of earnings credits from overnight cash balances  
as follows:                                                                     

Fund                           Reduction                      
-----------------------------------------                     
IDS California                   $21,895                      
IDS Massachusetts                  5,037                      
IDS Michigan                       1,875                      
IDS Minnesota                     67,538                      
IDS New York                      11,763                      
IDS Ohio                           7,240                      

--------------------------------------------------------------------------------
3. Securities transactions                                                      

For the period ended Dec. 31, 1996, cost of purchases and proceeds from sales   
(other than short-term obligations) aggregated for each Fund are as follows:    

         Fund                                 Purchases                 Proceeds
         -----------------------------------------------------------------------
         IDS California                     $18,092,522              $18,025,929
         IDS Massachusetts                    2,436,948                1,991,920
         IDS Michigan                        11,302,011               11,172,825
         IDS Minnesota                       28,723,798               30,136,693
         IDS New York                         2,752,218                5,459,325
         IDS Ohio                             5,507,081                9,355,000

Net realized gains and losses on investment sales are determined on an          
identified cost basis.                                                          
--------------------------------------------------------------------------------
4. Capital share transactions                                                   

Transactions in shares of each Fund for the periods indicated are as follows:   

                        California Tax-Exempt Fund
                        Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 1,743,707               390,126            
Issued for reinvested distributions    907,128                29,733            
Redeemed                            (3,371,303)             (122,129)           
--------------------------------------------------------------------            
Net increase  (decrease)              (720,468)              297,730            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 4,511,208               995,477            
Issued for reinvested distributions  1,925,937                35,294            
Redeemed                            (7,378,222)             (184,480)           
--------------------------------------------------------------------            
Net increase (decrease)               (941,077)              846,291            
--------------------------------------------------------------------            

                       Massachusetts Tax-Exempt Fund
                      Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                   695,017               289,211            
Issued for reinvested distributions    257,660                21,743            
Redeemed                            (1,050,329)              (98,002)           
--------------------------------------------------------------------            
Net increase (decrease)                (97,652)              212,952            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 2,049,431               819,429            
Issued for reinvested distributions    529,225                27,882            
Redeemed                            (2,742,630)             (147,842)           
--------------------------------------------------------------------            
Net increase (decrease)               (163,974)              699,469            
--------------------------------------------------------------------            

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                      Michigan Tax-Exempt Fund
                      Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                   499,257               112,785            
Issues for reinvested distributions    286,006                 9,293            
Redeemed                            (1,088,331)              (42,580)           
--------------------------------------------------------------------            
Net increase (decrease)               (303,068)               79,498            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 1,429,150               315,865            
Issued for reinvested distributions    725,994                15,490            
Redeemed                            (1,794,375)              (30,500)           
--------------------------------------------------------------------            
Net increase                           360,769               300,855            
--------------------------------------------------------------------            

                         Minnesota Tax-Exempt Fund
                          Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 3,383,674               726,544            
Issued for reinvested distributions  1,691,866                68,284            
Redeemed                            (7,809,635)             (194,833)           
--------------------------------------------------------------------            
Net increase (decrease)             (2,734,095)              599,995            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 8,270,935             2,429,988            
Issued for reinvested distributions  3,510,209                76,278            
Redeemed                           (13,742,113)             (192,219)           
--------------------------------------------------------------------            
Net increase (decrease)             (1,960,969)             2,314,047           
--------------------------------------------------------------------            

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                        New York Tax-Exempt Fund
                        Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                   983,579               233,517            
Issued for reinvested distributions    470,446                21,893            
Redeemed                            (2,376,817)              (39,793)           
--------------------------------------------------------------------            
Net increase  (decrease)              (922,792)              215,617            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 1,906,925               744,701            
Issued for reinvested distibutions   1,006,844                30,877            
Redeemed                            (3,672,303)             (166,438)           
--------------------------------------------------------------------            
Net increase (decrease)               (758,534)              609,140            
--------------------------------------------------------------------            

                      Ohio Tax-Exempt Fund
                      Six months ended Dec. 31, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                   508,212               180,956            
Issued for reinvested distributions    273,865                 8,467            
Redeemed                            (1,598,476)              (73,830)           
--------------------------------------------------------------------            
Net increase (decrease)               (816,399)              115,593            
--------------------------------------------------------------------            

                        Year ended June 30, 1996
                           Class A               Class B
--------------------------------------------------------------------            
Sold                                 1,279,987               327,095            
Issued for reinvested distributions    596,171                12,022            
Redeemed                            (2,225,461)              (59,086)           
--------------------------------------------------------------------            
Net increase (decrease)               (349,303)              280,031            
--------------------------------------------------------------------            

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--------------------------------------------------------------------------------
5. Interest rate futures contracts                                              

Investments in securities at Dec. 31, 1996, included securities that were       
pledged as collateral to cover initial margin deposits (see summary of          
significant accounting policies) as follows:                                    

                                                                Open
                                                            purchase
Fund                                     Value                contracts   
-----------------------------------------------------------------------   
IDS California                      $3,293,850                       32   
IDS Massachusetts                    1,753,293                        9   
IDS Michigan                           562,715                       10   
IDS Minnesota                        6,544,610                       51   
IDS New York                         2,242,288                       63   
IDS Ohio                             2,130,369                        9   

The market value of the open contracts at Dec. 31, 1996, was as follows:        

                                                                   Net
                                            Market          unrealized
Fund                                     value                     gain   
-----------------------------------------------------------------------   
IDS California                      $3,714,000                   34,156   
IDS Massachusetts                    1,044,562                    9,562   
IDS Michigan                         1,160,625                   10,468   
IDS Minnesota                        5,919,188                   54,187   
IDS New York                         7,311,938                   78,032   
IDS Ohio                             1,044,563                    9,562   

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 as follows at June
30, 1996:                                                                       

Fund                           Carryover                      
------------------------------------------                    
IDS California                $  182,601                      
IDS Massachusetts                426,167                      
IDS Michigan                     216,362                      
IDS Minnesota                  2,911,065                      
IDS New York                   2,695,894                      
IDS Ohio                         843,358                      

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.                                           

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IDS California Tax-Exempt Trust                                                                       
IDS California Tax-Exempt Fund                                                                        
--------------------------------------------------------------------------------                      
7. Financial Highlights                                                                               

The table below shows certain important financial information for evaluating the                      
Fund's results.                                                                                       
Fiscal period ended June 30,                                                                          
                     Per share income and capital changes***                                          
                                                 Class A                                              
                                                                                                      
                       1996+   1996   1995  1994    1993  1992   1991  1990   1989*  1988** 1987**    
Net asset value,       $5.15  $5.16  $5.13 $5.41   $5.18 $4.94  $4.89 $4.97   $4.82   $4.66  $5.07    
beginning of period                                                                                   
                     Income from investment operations:                                               
Net investment           .14    .28    .30   .31     .30   .31    .32   .32     .16     .32    .32    
income                                                                                                
Net gains (losses)       .11    .02    .03  (.28)    .23   .24    .05  (.08)    .15     .16   (.41)   
(both realized                                                                                        
and unrealized)                                                                                       
Total from               .25    .30    .33   .03     .53   .55    .37   .24     .31     .48   (.09)   
investment                                                                                            
operations                                                                                            
                     Less distributions:                                                              
Dividends from net      (.14)  (.28)  (.30) (.31)   (.30) (.31)  (.32) (.32)   (.16)   (.32)  (.32)   
investment income                                                                                     
Distributions from      (.01)  (.03)    --    --      --    --     --    --      --      --     --    
realized gains                                                                                        
Total distributions     (.15)  (.31)  (.30) (.31)   (.30) (.31)  (.32) (.32)   (.16)   (.32)  (.32)   
Net asset value,       $5.25  $5.15  $5.16 $5.13   $5.41 $5.18  $4.94 $4.89   $4.97   $4.82  $4.66    
end of period                                                                                         
                     Ratios/supplemental data:                                                        
                                                 Class A                                              
                       1996+   1996   1995  1994    1993  1992   1991  1990   1989*  1988** 1987**    
Net assets, end of      $235   $234   $239  $255    $261  $222   $185  $142     $95     $63    $40    
period (in millions)                                                                                  
Ratio of expenses to    .83%++  .80%   .65%  .61%    .63%  .64%   .60%  .62%    .64%++  .72%   .78%   
average daily net                                                                                     
assets##                                                                                              
Ratio of net income    5.33%++ 5.40%  5.89% 5.67%   5.78% 6.16%  6.51% 6.53%   6.67%++   6.61%  6.74% 
to                                                                                                    
average daily net                                                                                     
assets                                                                                                
Portfolio turnover        8%     15%    48%   27%      5%    7%    23%   20%      6%       13%    16% 
rate(excluding                                                                                        
short-term securities)                                                                                
 Total return#          4.9%    6.0%   6.5%  0.4%   10.8% 11.4%   7.7%  5.0%    6.5%+++  10.5%  (1.6%)


* Six months ended June 30, 1989.  The Fund's fiscal year end was           
changed from Dec. 31 to June 30, effective 1989.                      
** Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.                        
*** For a share outstanding throughout the period.  Rounded to the nearest cent.
+ Six months ended Dec. 31, 1996 (Unaudited).                               
++ Adjusted to an annual basis.                                               
+++ For the fiscal period ended June 30, 1989, the  annualized  total return was
13.6%.                                                                  
# Total return does not reflect payment of a sales charge.                  
## Effective fiscal year 1996, expense ratio is based on total expenses       
of the Fund before reduction of earnings credits on cash balances.      

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The table below shows certain important financial information for evaluating the
Fund's results. Fiscal period ended June 30,                                    
   Per share income and capital changes*
Class B           
1996***    1996 1995**            
Net asset value,         $5.15   $5.16  $5.21                                   
beginning of period                                                             
Income from investment operations:
Net investment income      .12     .24    .09                                   
Net gains (losses)         .11     .02   (.05)                                  
(both realized                                                                  
and unrealized)                                                                 
Total from investment      .23     .26    .04                                   
operations                                                                      
Less distributions:               
Dividends from net        (.12)   (.24)  (.09)                                  
investment income                                                               
Distributions from        (.01)   (.03)    --                                   
realized gains                                                                  
Total distributions       (.13)   (.27)  (.09)                                  
Net asset value,         $5.25   $5.15  $5.16                                   
end of period                                                                   
Ratios/supplemental data:         
Class B           
1996***    1996 1995**            
Net assets, end of          $8      $6     $2                                   
period (in millions)                                                            
Ratio of expenses to    1.56%+   1.57% 1.51%+                                   
average daily net                                                               
assets#                                                                         
Ratio of net income to  4.59%+   4.64% 4.87%+                                   
average daily net                                                               
assets                                                                          
Portfolio turnover         8%      15%   48%                                    
rate                                                                            
(excluding short-term                                                           
securities)                                                                     
Total return++           4.5%     5.2%  0.8%                                    

 * For a share outstanding throughout the period. Rounded to the nearest cent.
** Inception date was March 20, 1995.                                         
*** Six months ended Dec. 31, 1996 (Unaudited).                                 
+ Adjusted to an annual basis.                                              
++ Total return does not reflect payment of a sales charge.                   
# Effective fiscal year 1996, expense ratio is based on total               
   expenses of the Fund before reduction of earnings credits on cash balances.

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IDS Special Tax-Exempt Series Trust                                                       
IDS Massachusetts Tax-Exempt Fund                                                         
Financial highlights                                                                      

The table below shows certain important financial information for evaluating the          
Fund's results.                                                                           
Fiscal period ended June 30,                                                              
                         Per share income and capital changes*                            
                                                   Class                                  
                                                   A                                      
                                                                                          
                         1996**   1996  1995  1994   1993  1992  1991  1990  1989    1988 
Net asset value,          $5.30  $5.27 $5.24 $5.49  $5.20 $4.96 $4.88 $5.01 $4.91   $5.00 
beginning of period                                                                       
                         Income from investment operations:                               
Net investment income       .14    .28   .30   .30    .30   .31   .32   .32   .32     .31 
Net gains (losses)          .11    .03   .03  (.25)   .29   .24   .08  (.12)  .12    (.06)
(both realized                                                                            
and unrealized)                                                                           
Total from investment       .25    .31   .33   .05    .59   .55   .40   .20   .44     .25 
operations                                                                                
                         Less distributions:                                              
Dividends from net         (.14)  (.28) (.30) (.30)  (.30) (.31) (.32) (.32) (.32)   (.31)
investment income                                                                         
Distributions from           --     --    --    --     --    --    --  (.01) (.02)   (.03)
realized gains                                                                            
Total distributions        (.14)  (.28) (.30) (.30)  (.30) (.31) (.32) (.33) (.34)   (.34)

Net asset value,          $5.41  $5.30 $5.27 $5.24  $5.49 $5.20 $4.96 $4.88 $5.01   $4.91 
end of period                                                                             
                         Ratios/supplemental data:                                        
                                                   Class                                  
                                                   A                                      
                         1996**   1996  1995  1994   1993  1992  1991  1990  1989    1988 
Net assets, end of          $69    $68   $68   $72    $64   $44   $27   $19   $13      $4 
period (in millions)                                                                      
Ratio of expenses to      .90%#   .86%  .72%  .69%   .72%  .72%  .69%  .70%  .84%  .93%***
average daily net                                                                         
assets++                                                                                  
Ratio of net income to   5.22%#  5.26% 5.74% 5.40%  5.57% 6.05% 6.53% 6.59% 6.55% 6.40%***
average daily net assets                                                                  
Portfolio turnover rate     3%      6%   16%    6%     0%    2%   16%   36%   25%   34%   
(excluding short-term                                                                     
securities)                                                                               
Total return+             4.8%    6.0%  6.5%  0.9%  11.5% 11.4%  8.5%  4.2%  9.2%  5.3%   

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Six months ended Dec. 31, 1996 (Unaudited).                                
***  During  the  period  from July 2, 1987 to March 31,  1988,American  Express
Financial Corporation  voluntarily reimbursed the Fund for expenses in
   excess of 0.75% of its average daily net assets,  on an annual basis. Had
American Express Financial Corporation not done so, the ratio of net  
investment income would have been 1.30% and 6.03%, respectively.      
# Adjusted to an annual basis.                                            
+ Total return does not reflect payment of a sales charge.                
  ++ Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.           

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The table below shows certain important financial information for evaluating the
Fund's results.                                                                 
Fiscal period ended June 30,                                                    
       Per share income and capital changes*
Class B     
1996***     1996   1995**   
Net asset value,            $5.30    $5.27    $5.31                             
beginning of period                                                             
    Income from investment operations:
Net investment income         .12      .24      .09                             
Net gains (losses)            .11      .03     (.04)                            
(both realized                                                                  
and unrealized)                                                                 
Total from investment         .23      .27      .05                             
operations                                                                      
Less distributions:           
Dividends from net           (.12)    (.24)    (.09)                            
investment income                                                               

Net asset value,            $5.41    $5.30    $5.27                             
end of period                                                                   
Ratios/supplemental data:     
Class B     
1996***  1996    1995**       
Net assets, end                $7       $6       $2                             
of                                                                              
period (in                                                                      
millions)                                                                       
Ratio of expenses to       1.65%+    1.63%   1.59%+                             
average daily net                                                               
assets+++                                                                       
Ratio of net income to     4.48%+    4.51%   4.83%+                             
average daily net assets                                                        
Portfolio turnover rate       3%        6%      16%                             
(excluding short-term                                                           
securities)                                                                     
Total return++              4.4%      5.2%     0.9%                             

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Inception date was March 20, 1995.                                         
*** Six months ended Dec. 31, 1996 (Unaudited).                                 
+ Adjusted to an annual basis.                                              
++ Total return does not reflect payment of a sales charge.                   
+++ Effective fiscal year 1996, expense ratio is based on total expenses        
of the Fund before reduction of earnings credit on cash balances.       

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IDS Special Tax-Exempt Series Trust                                                         
IDS Michigan Tax-Exempt Fund                                                                
Financial highlights                                                                        

The table below shows certain important financial information for evaluating the            
Fund's results.                                                                             
Fiscal period ended June 30,                                                                
                       Per share income and capital changes*                                
                                                  Class                                     
                                                  A                                         
                                                                                            
                       1996**    1996  1995  1994   1993   1992  1991  1990  1989    1988   
Net asset value,        $5.36   $5.39 $5.35 $5.60  $5.31  $5.04 $4.96 $5.08 $4.85   $5.00   
beginning of period                                                                         
                       Income from investment operations:                                   
Net investment income     .14     .30   .30   .31    .31    .32   .32   .32   .32     .31   
Net gains (losses)        .10     .04   .05  (.25)   .29    .27   .08  (.12)  .23   (.11)   
(both realized                                                                              
and unrealized)                                                                             
Total from investment     .24     .34   .35   .06    .60    .59   .40   .20   .55     .20   
operations                                                                                  
                       Less distributions:                                                  
Dividends from net       (.14)   (.30) (.31) (.31)  (.31)  (.32) (.32) (.32) (.32)   (.31)  
investment income                                                                           
Distributions from         --    (.07)   --    --     --     --    --    --    --    (.04)  
realized gains                                                                              
Total distributions      (.14)   (.37) (.31) (.31)  (.31)  (.32) (.32) (.32) (.32)   (.35)  
Net asset value,        $5.46   $5.36 $5.39 $5.35  $5.60  $5.31 $5.04 $4.96 $5.08   $4.85   
end of period                                                                               
                       Ratios/supplemental data:                                            
                                                  Class                                     
                                                  A                                         
                       1996**    1996  1995  1994   1993   1992  1991  1990  1989    1988   
Net assets, end of        $79     $79   $78   $77    $72    $55   $41   $29   $16      $8   
period (in millions)                                                                        
Ratio of expenses to    .85%#    .82%  .70%  .65%   .68%   .67%  .67%  .71%  .81%    .87%***
average daily net                                                                           
assets+                                                                                     
Ratio of net income to  5.35#   5.37% 5.71% 5.43%  5.64%  6.18% 6.45% 6.47% 6.50%   6.56%***
average daily net                                                                           
assets                                                                                      
Portfolio turnover        14%     29%   48%   16%     2%     0%    3%    5%   10%     14%   
rate                                                                                        
(excluding short-term                                                                       
securities)                                                                                 
Total return++           4.5%    6.3%  6.6%  1.0%  11.6%  12.0%  8.3%  4.1% 11.7%    4.4%   

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Six months ended Dec. 31, 1996 (Unaudited).                                
*** During the period from July 2, 1987 to March 31, 1988, American Express     
Financial Corporation voluntarily reimbursed the Fund for expenses in   
excess of 0.75% of its average daily net assets, on an annual basis. Had
  American Express Finanacial Corporation not done so, the ratio of expenses
and ratio of net investment income would have been 1.09% and 6.34%,     
respectively.                                                           
# Adjusted to an annual basis.                                              
 + Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.             
++ Total return does not reflect payment of a sales charge.                   

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The table below shows certain important financial information for evaluating the
Fund's results.                                                                 
Fiscal period ended June 30,                                                    

   Per share income and capital changes*
Class B         
1996***     1996  1995**        
Net asset value,          $5.36    $5.39   $5.43                                
beginning of period                                                             
Income from investment operations:
Net investment income       .12      .25     .09                                
Net gains (losses)          .10      .04    (.04)                               
(both realized                                                                  
and unrealized)                                                                 
Total from investment       .22      .29     .05                                
operations                                                                      
Less distributions:               
Dividends from net         (.12)    (.25)   (.09)                               
investment income                                                               
Distributions from           --     (.07)     --                                
realized gains                                                                  
Total distributions        (.12)    (.32)   (.09)                               
Net asset value,          $5.46    $5.36   $5.39                                
end of period                                                                   
Ratios/supplemental data:         
Class B         
1996***     1996  1995**        
Net assets, end of           $3       $3      $1                                
period (in millions)                                                            
Ratio of expenses to     1.59%+    1.59%  1.62%+                                
average daily net                                                               
assets++                                                                        
Ratio of net income to   4.63%+    4.63%  4.89%+                                
average daily net                                                               
assets                                                                          
Portfolio turnover         14%       29%    48%                                 
rate                                                                            
(excluding short-term                                                           
securities)                                                                     
Total return+++           4.1%      5.6%   0.9%                                 

   * For a share outstanding throughout the period. Rounded to the nearest cent.
** Inception date was March 20, 1995.                                       
*** Six months ended Dec. 31, 1996 (Unaudited).                               
+ Adjusted to an annual basis.                                            
++ Effective fiscal year 1996, expense ratio is based on total expenses the 
Fund before reduction of earnings credits on cash balances.           
+++ Total return does not reflect payment of a sales charge.                  

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IDS Special Tax-Exempt Series Trust                                                                 
IDS Minnesota Tax-Exempt Fund                                                                       
Financial highlights                                                                                

The table below shows certain important financial information for evaluating the                    
Fund's results.                                                                                     
Fiscal period ended June 30,                                                                        
                       Per share income and capital changes***                                      
                                                    Class A                                         
                                                                                                    
                         1996+    1996   1995  1994    1993  1992  1991  1990   1989* 1988** 1987** 
Net asset value,         $5.20   $5.19  $5.16 $5.44   $5.22 $5.01 $4.95 $5.05   $4.86  $4.76  $5.18 
beginning of period                                                                                 
                       Income from investment operations:                                           
Net investment income      .15     .30    .31   .31     .31   .33   .33   .32     .16    .33    .33 
Net gains (losses)         .09     .01    .03  (.28)    .22   .21   .06  (.10)    .19    .10   (.42)
(both realized                                                                                      
and unrealized)                                                                                     
Total from investment      .24     .31    .34   .03     .53   .54   .39   .22     .35    .43   (.09)
operations                                                                                          
                       Less distributions:                                                          
Dividends from net        (.15)   (.30)  (.31) (.31)   (.31) (.33) (.33) (.32)   (.16)  (.33)  (.33)
investment income                                                                                   
Net asset value,         $5.29   $5.20  $5.19 $5.16   $5.44 $5.22 $5.01 $4.95   $5.05  $4.86  $4.76 
end of period                                                                                       
                       Ratios/supplemental data:                                                    
                                                    Class                                           
                                                    A                                               
                         1996+    1996   1995  1994    1993  1992  1991  1990   1989* 1988** 1987** 
Net assets, end of        $386    $393   $403  $408    $402  $313  $233  $181    $121    $82    $50 
period (in millions)                                                                                
Ratio of expenses to      .78%+++  80%   .67%  .66%    .67%  .66%  .63%  .64%  .65%++   .65%   .78% 
average daily net                                                                                   
assets##                                                                                            
Ratio of net income to   5.81%++ 5.66%  6.01% 5.73%   5.91% 6.43% 6.67% 6.62% 6.84%+++ 6.73%  6.83% 
average daily net                                                                                   
assets                                                                                              
Portfolio turnover          7%     13%    28%   13%      2%    7%   10%    8%      0%    14%    40% 
rate                                                                                                
(excluding short-term                                                                               
securities)                                                                                         
 Total return+++          4.8%    5.9%   6.8%  0.4%   10.5% 11.0%  8.2%  4.8%    7.4%#  9.3%  (1.4%)

* Six months ended June 30, 1989.  The Fund's fiscal year end was           
changed from Dec. 31 to June 30, effective 1989.                        
** Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.                        
*** For a share outstanding throughout the period.  Rounded to the nearest cent.
+ Six months ended Dec. 31, 1996 (Unaudited).                               
++ Adjusted to an annual basis.                                               
+++ Total return does not reflect payment of a sales charge.                    
# For the fiscal period ended June 30, 1989, the annualized total return    
was 15.5%.                                                              
## Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credit on cash balances.              

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The table below shows certain important financial information for evaluating the
Fund's results.                                                                 

Fiscal period ended June 30,                                                    

   Per share income and capital changes*
Class B           
1996***    1996   1995**          
Net asset value,         $5.20   $5.19    $5.24                                 
beginning of period                                                             
Income from investment operations:
Net investment income      .13     .26      .09                                 
Net gains (losses)         .09     .01      (05)                                
(both realized                                                                  
and unrealized)                                                                 
Total from investment      .22     .27      .04                                 
operations                                                                      
Less distributions:               
Dividends from net        (.13)   (.26)    (.09)                                
investment income                                                               
Net asset value,         $5.29   $5.20    $5.19                                 
end of period                                                                   
Ratios/supplemental data:         
Class B           
1996***    1996   1995**          
Net assets, end of         $20     $16       $4                                 
period (in millions)                                                            
Ratio of expenses to     1.53%+   1.57%   1.27%+                                
average daily net                                                               
assets #                                                                        
Ratio of net income to   5.06%+   4.94%   5.40%+                                
average daily net                                                               
assets                                                                          
Portfolio turnover          7%      13%     28%                                 
rate                                                                            
(excluding short-term                                                           
securities)                                                                     
Total return++            4.4%     5.2%    0.8%                                 

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Inception date was March 20, 1995.                                         
*** Six months ended Dec. 31, 1996 (Unaudited).                                 
+ Adjusted to an annual basis.                                              
++ Total return does not reflect payment of a sales charge.                   
 # Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before redution of earnings credit on cash balances.               

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IDS Special Tax-Exempt Series Trust                                                                
IDS New York Tax-Exempt Fund                                                                       
Financial highlights                                                                               

The table below shows certain important financial information for evaluating the                   
Fund's results. Fiscal period ended June 30,                                                       
                       Per share income and capital changes***                                     
                                                   Class A                                         
                                                                                                   
                         1996+   1996   1995  1994    1993  1992  1991  1990   1989* 1988** 1987** 
Net asset value,         $5.06  $5.09  $5.12 $5.41   $5.13 $4.86 $4.80 $4.87   $4.73  $4.58  $5.07 
beginning of period                                                                                
                       Income from investment operations:                                          
Net investment income      .14    .29    .30   .30     .30   .31   .31   .31     .16    .31    .31 
Net gains (losses)         .09   (.03)  (.03) (.29)    .28   .27   .06  (.07)    .14    .15   (.49)
(both realized                                                                                     
and unrealized)                                                                                    
Total from investment      .23    .26    .27   .01     .58   .58   .37   .24     .30    .46   (.18)
operations                                                                                         
                       Less distributions:                                                         
Dividends from net        (.14)  (.29)  (.30) (.30)   (.30) (.31) (.31) (.31)   (.16)  (.31)  (.31)
investment income                                                                                  
Net asset value,         $5.15  $5.06  $5.09 $5.12   $5.41 $5.13 $4.86 $4.80   $4.87  $4.73  $4.58 
end of period                                                                                      
                       Ratios/supplemental data:                                                   
                                                   Class A                                         
                         1996+   1996   1995  1994    1993  1992  1991  1990   1989* 1988** 1987** 
Net assets, end of        $112   $115   $120  $120    $117   $95   $79   $68     $49    $34    $21 
period (in millions)                                                                               
Ratio of expenses to     .82%++  .82%   .70%  .65%    .67%  .67%  .65%  .65%   .66%++  .71%   .88% 
average daily net                                                                                  
assets##                                                                                           
Ratio of net income to  5.51%++ 5.51%  6.00% 5.61%   5.79% 6.26% 6.53% 6.57%  6.78%++ 6.61%  6.79% 
average daily net                                                                                  
assets                                                                                             
Portfolio turnover         2%      9%    20%   10%      0%    8%   17%    8%     1%      6%    20% 
rate                                                                                               
(excluding short-term                                                                              
securities)                                                                                        
Total return+++          4.5%    5.2%   5.5%  0.1%   11.6% 12.3%  8.2%  5.0%   6.5%#  10.3%  (3.4%)


* Six months ended June 30, 1989.  The Fund's fiscal year was               
changed from Dec. 31 to June 30, effective 1989.                        
** Fiscal years ended Dec. 31, 1987 and Dec. 31, 1988.                        
*** For a share outstanding throughout the period.  Rounded to the nearest cent.
+ Six months ended Dec. 31, 1996 (Unaudited).                               
++ Adjusted to an annual basis.                                               
+++ Total return does not reflect payment of a sales charge.                    
# For the fiscal period ended June 30, 1989, the annualized total           
return was 13.6%.                                                       
## Effective fiscal year 1996, expense ratio is based on total expense of the 
Fund before reduction of earnings credits on cash balances.             

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IDS Special Tax-Exempt Series Trust                                             
IDS New York Tax-Exempt Fund                                                    
Financial highlights                                                            

The table below shows certain important financial information for evaluating the
Fund's results. Fiscal period ended June 30,                                    

       Per share income and capital changes*
Class B       
1996***     1996   1995**     
Net asset value,           $5.06    $5.09    $5.17                              
beginning of period                                                             
    Income from investment operations:
Net investment income        .12      .25      .09                              
Net gains (losses)           .09     (.03)    (.08)                             
(both realized                                                                  
and unrealized)                                                                 
Total from investment        .21      .22      .01                              
operations                                                                      
Less distributions:           
Dividends from net          (.12)    (.25)    (.09)                             
investment income                                                               
Net asset value,           $5.15    $5.06    $5.09                              
end of period                                                                   
Ratios/supplemental data:     
Class B       
1996***     1996   1995**     
Net assets, end of            $6       $5       $2                              
period (in millions)                                                            
Ratio of expenses to       1.57%++  1.59%    1.59%++                            
average daily net                                                               
assets+++                                                                       
Ratio of net income to     4.76%++  4.79%    5.42%++                            
average daily net assets                                                        
Portfolio turnover rate       2%       9%      20%                              
(excluding short-term                                                           
securities)                                                                     
Total return+               4.1%     4.4%     0.2%                              

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Inception date was March 20, 1995.                                         
*** Six months ended Dec. 31, 1996 (Unaudited).                                 
+ Total return does not reflect payment of a sales charge.                  
++ Adjusted to an annual basis.                                               
+++ Effective fiscal year 1996, expense ratio is based on total expense of the  
Fund before reduction of earnings credits on cash balances.             

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IDS Special Tax-Exempt Series Trust                                                      
IDS Ohio Tax-Exempt Fund                                                                 
Financial highlights                                                                     

The table below shows certain important financial information for evaluating the         
Fund's results.                                                                          
Fiscal period ended June 30,                                                             
                       Per share income and capital changes*                             
                                                  Class A                                
                                                                                         
                       1996**    1996  1995  1994    1993  1992  1991  1990  1989   1988 
Net asset value,        $5.28   $5.28 $5.26 $5.58   $5.28 $5.01 $4.94 $5.04 $4.87  $5.00 
beginning of period                                                                      
                       Income from investment operations:                                
Net investment income     .14     .29   .29   .30     .30   .31   .32   .31   .31    .32 
Net gains (losses)        .11     .01   .03  (.32)    .31   .27   .07  (.09)  .18   (.10)
(both realized                                                                           
and unrealized)                                                                          
Total from investment     .25     .30   .32  (.02)    .61   .58   .39   .22   .49    .22 
operations                                                                               
                       Less distributions:                                               
Dividends from net       (.14)   (.29) (.30) (.30)   (.30) (.31) (.32) (.31) (.31)  (.32)
investment income                                                                        
Distributions from         --    (.01)   --    --    (.01)   --    --  (.01) (.01)  (.03)
realized gains                                                                           
Total distributions      (.14)   (.30) (.30) (.30)   (.31) (.31) (.32) (.32) (.32)  (.35)
Net asset value,        $5.39   $5.28 $5.28 $5.26   $5.58 $5.28 $5.01 $4.94 $5.04  $4.87 
end of period                                                                            
                       Ratios/supplemental data:                                         
                                                  Class A                                
                       1996**    1996  1995  1994    1993  1992  1991  1990  1989   1988 
Net assets, end of        $69     $72   $73   $72     $65   $47   $33   $25   $16     $8 
period (in millions)                                                                     
Ratio of expenses to     .85%#   .85%  .71%  .66%    .67%  .70%  .68%  .70%  .82%   .86%+
average daily net                                                                        
assets##                                                                                 
Ratio of net income to  5.38%#  5.35% 5.65% 5.44%   5.65% 6.14% 6.41% 6.43% 6.40%  6.64%+
average daily net                                                                        
assets                                                                                   
Portfolio turnover         8%     24%   45%   11%      0%    5%    2%    6%   10%     0% 
rate(excluding                                                                           
short-term securities)                                                                   
Total return++           4.7%    5.7%  6.2% (0.5%)  12.1% 11.9%  8.1%  4.6% 10.5%   4.7% 

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Six months ended Dec. 31, 1996 (Unaudited).                                
+ During the period from July 2, 1987 to March 31, 1988, American Express   
    Financial Corporation voluntarily reimbursed the Fund for expenses in excess
  of 0.75% of its average daily net assets, on an annual basis. Had American
Express Financial Corporation not done so, the ratio of net investment  
income would have been 1.09% and 6.41%, respectively.                   
++ Total return does not reflect payment of a sales charge.                   
# Adjusted to an annual basis.                                              
## Effective fiscal year 1996, expense ratio is based on total expense of the 
Fund before reduction of earnings credits on cash balances.             

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The table below shows certain important financial information for evaluating the
Fund's results. Fiscal period ended June 30,                                    

   Per share income and capital changes*
Class B           
1996***    1996  1995**           
Net asset value,         $5.28   $5.28   $5.34                                  
beginning of period                                                             
Income from investment operations:
Net investment income      .12     .24     .09                                  
Net gains (losses)         .11     .01    (.06)                                 
(both realized                                                                  
and unrealized)                                                                 
Total from investment      .23     .25     .03                                  
operations                                                                      
Less distributions:               
Dividends from net        (.12)   (.24)   (.09)                                 
investment income                                                               
Distributions from          --    (.01)     --                                  
realized gains                                                                  
Total distributions       (.12)   (.25)   (.09)                                 
Net asset value,         $5.39   $5.28   $5.28                                  
end of period                                                                   
Ratios/supplemental data:         
Class B           
1996***    1996  1995**           
Net assets, end of          $3      $2      $1                                  
period (in millions)                                                            
Ratio of expenses to     1.61%+  1.59%   1.66%+                                 
average daily net                                                               
assets#                                                                         
Ratio of net income to   4.64%+  4.63%   4.58%+                                 
average daily net                                                               
assets                                                                          
Portfolio turnover          8%     24%     45%                                  
rate (excluding                                                                 
short-term securities)                                                          
Total return++            4.4%    5.0%    0.6%                                  

  * For a share outstanding throughout the period.  Rounded to the nearest cent.
** Inception date was March 20, 1995.                                         
*** Six months ended Dec. 31, 1996 (Unaudited).                                 
+ Adjusted to an annual basis.                                              
++ Total return does not reflect payment of a sales charge.                   
 # Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.             

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Investments in securities                                                                                                           

IDS California Tax-Exempt Fund                                                                       (Percentages represent value of
Dec. 31, 1996 (Unaudited)                                                                        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                   
----------------------------------------------------------------------------------------------------------------------------------- 
Aliso Viejo Orange County District Community Facilities                                                                             
                                                                                                                                    
  District #88-1 Special Tax Bonds Series 1992A                              7.35 %        2018       $ 3,000,000     $ 3,492,810   
ABAG Finance Authority for Nonprofit Corporations                                                                                   
  Certificate of Participation International School Project                                                                         
  Series 1996                                                                7.375         2026         2,200,000        2,092,970  
Anaheim Public Finance Authority Revenue Bonds                                                                                      
  2nd Series Electric Utilities San Juan (FGIC Insured)                      5.75          2022        11,100,000       11,156,721  
Brea Redevelopment Agency Tax Allocation Refunding Bonds                                                                            
  Redevelopment Project AB (MBIA Insured)                                    5.50          2017         1,800,000        1,771,596  
Burbank Redevelopment Agency Tax Allocation Bonds                                                                                   
  Golden State Series 1993A                                                  6.00          2023         2,000,000        2,016,360  
Cathedral Public Finance Authority                                                                                                  
   Revenue Tax Allocation Bonds Series A (MBIA Insured)                      5.50          2017         2,230,000        2,197,487  
Chapman College Educational Facilities Authority                                                                                    
  Revenue Bonds Series 1989B                                                 7.50          2018           500,000          563,900  
Chico Walker Senior Housing Insured Revenue Bonds                                                                                   
  The Lodge Series 1993A                                                     5.70          2023         1,500,000        1,473,570  
Clearlake Redevelopment Agency                                                                                                      
  Highlands Park Community Development                                                                                              
  Tax Allocation Bonds Series 1993                                           6.40          2023         1,420,000        1,433,064  
Eastern Municipal Water District Riverside County                                                                                   
  Water & Sewer Revenue Certificates of Participation                                                                               
  Series 1991                                                                6.00          2023         1,000,000        1,012,860  
Eastern Municipal Water District Riverside County                                                                                   
  Water & Sewer Pre-Refunded Revenue Certificates of                                                                                
  Participation Series 1991(FGIC Insured)                                    6.50          2020         3,000,000        3,319,590  
El Camino Hospital District Hospital Pre-Refunded Revenue                                                                           
  Certificate of Participation Series A                                      8.50          2017         1,500,000        1,579,125  
Encinitas Unified School District                                                                                                   
   Unlimited General Obligation Bonds                                                                                               
   Series 1996 Zero Coupon (MBIA Insured)                                    5.85       2015-16        3,500,000(h)      1,205,430  
Fontana Redevelopment Agency                                                                                                        
  Refunding Certificate of Participation                                                                                            
  Police Facility Series 1993                                                5.625         1997         4,500,000        4,378,455  
Fontana Unified School District                                                                                                     
  Unlimited Tax General Obligation Bonds                                                                                            
  CVT Series C Zero Coupon (FGIC Insured)                                    8.03          1997        3,470,000(e)      3,523,056  
Foothill-De Anza Community College Santa Clara County                                                                               
  Refunding Certificate of Participation Series 1993                                                                                
  (Connie Lee Insured)                                                       5.25          2021         1,675,000        1,569,375  
Foothill/Eastern Transportation Corridor Agency Toll Road                                                                           
  Senior Lien Revenue Bonds Series 1995A                                     6.00          2034         1,775,000        1,776,313  
Garden Grove Agency Community Development                                                                                           
  Tax Allocation Refunding Bonds                                                                                                    
  Garden Grove Community                                                     5.875         2023         3,000,000        2,922,750  
Garden Grove Certificate of Participation                                                                                           
  Bahia Village/Emerald Isle                                                                                                        
  (FSA Insured)                                                              5.70          2023         2,660,000        2,652,632  
Hayward Civic Center Project                                                                                                        
   Certificate of Participation Series 1996 (MBIA Insured)                   5.50          2017         1,000,000          990,230  
Huntington Beach Certificate of Participation Revenue Bonds                                                                         
  Civic Center Refinancing (AMBAC Insured)                                   5.50          2016         1,715,000        1,684,662  
Indian Wells Improvement Bonds                                                                                                      
  Assessment District #13                                                    7.50          2008          370,000(g)        381,377  
Irwindale Redevelopment Agency Sub Lien                                                                                             
  Tax Allocation Bonds Series 1996                                           7.00          2019         1,700,000        1,783,589  
Janesville Union School District                                                                                                    
   Lassen County General Obligation Bonds                                                                                           
   Series 1996 Election Bank Qualified                                       6.45          2021           875,000          874,939  
Long Beach Harbor Revenue Bonds                                                                                                     
  Series 1989A A.M.T.                                                        7.25          2019        7,000,000(g)      7,390,390  
Los Angeles Convention & Exhibition Center                                                                                          
  Pre-Refunded Certificate of Participation                                                                                         
  Series 1989A                                                               7.00          2020         5,000,000        5,435,900  
Los Angeles Convention & Exhibition Center                                                                                          
  Pre-Refunded Certificate of Participation Series 1989A                     7.30          2009         1,000,000        1,094,570  
Los Angeles Convention & Exhibition Center                                                                                          
  Pre-Refunded Certificate of Participation Series 1989A                     7.375         2018         2,900,000        3,179,618  
Los Angeles County Certificate of Participation                                                                                     
  Disney Parking                                                             5.50          2021         1,625,000        1,532,895  
Los Angeles County Metropolitan Transportation Authority                                                                            
  Sales Tax Revenue Bonds                                                                                                           
  2nd Series 1995A  (AMBAC Insured)                                          5.50          2017         1,650,000        1,632,015  
Los Angeles County Public Works Financing Authority                                                                                 
  Lease Refunding Revenue Bonds                                                                                                     
  Series 1996B (MBIA Insured)                                                5.25          2014         1,000,000          964,240  
Los Angeles County Transportation Commission                                                                                        
  Sales Tax Refunding Revenue Bonds Series A                                 7.00          2019         4,150,000        4,458,843  
Los Angeles County Transportation Commission                                                                                        
  Sales Tax Pre-Refunded Revenue Bonds Series A                              8.00          2016         2,000,000        2,084,980  
Los Angeles County Transportation Commission                                                                                        
  Sales Tax Pre-Refunded Revenue Bonds                                                                                              
  Series 1988A                                                               7.875         2008           500,000          538,850  
Los Angeles County Transportation Commission                                                                                        
  Sales Tax Refunding Revenue Bonds                                                                                                 
  Series 1989A                                                               7.40          2015         2,000,000        2,173,480  
Los Angeles Department of Water & Power                                                                                             
  Electric Plant Revenue Bonds Series 1990                                   7.125         2030         6,500,000        7,156,955  
Los Angeles Department of Water & Power                                                                                             
  Waterworks Refunding Revenue Bonds                                                                                                
  Second Issue (Secondary FGIC Insured)                                      4.50          2018         3,000,000        2,554,950  
Los Angeles International Airport Revenue Bonds                                                                                     
  Series D (FGIC Insured) A.M.T.                                             5.50          2015         1,000,000          989,670  
Los Angeles Multi-family Housing Revenue Bonds                                                                                      
  Park Parthenia Series 1986A                                                                                                       
  (GNMA Insured) A.M.T.                                                      7.40          2022         1,000,000        1,030,630  
Los Angeles Single Family Home Mortgage Revenue Bonds                                                                               
  Series 1991A (GNMA & FNMA Insured) A.M.T.                                  6.875         2025           810,000          838,480  
Los Angeles State Building Authority                                                                                                
  Lease Pre-Refunded Revenue Bonds                                                                                                  
  State Department of General Services Lease                                                                                        
  Series 1988A                                                               7.25          2006         1,500,000        1,591,320  
Los Angeles State Building Authority                                                                                                
  Lease Pre-Refunded Revenue Bonds                                                                                                  
  State Department of General Services Lease                                                                                        
  Series 1988A                                                               7.50          2011         1,500,000        1,595,565  
Los Angeles State Harbor Revenue Bonds                                                                                              
  Series 1996B A.M.T.                                                        5.375         2023         1,300,000        1,230,242  
Los Angeles State Harbor Revenue Bonds                                                                                              
  Escrowed to Maturity                                                       7.60          2018         1,000,000        1,233,870  
Los Angeles Unified School District                                                                                                 
  Certificate of Participation                                                                                                      
  Series 1996A (FSA Insured)                                                 5.50          2016         1,375,000        1,356,946  
Los Angeles Wastewater System                                                                                                       
  Pre-Refunded Revenue Bonds Series 1987                                     8.125         2017         1,000,000        1,057,960  
Los Angeles Wastewater System                                                                                                       
  Refunding Revenue Bonds Series D (FGIC Insured)                            4.70          2017         1,000,000          881,110  
Modesto Certificate of Participation Pre-Refunded Bonds                                                                             
  Community Center                                                           8.10          2015         1,000,000        1,057,750  
Mount Diablo Hospital District Hospital                                                                                             
  Pre-Refunded Revenue Bonds                                                                                                        
  Series 1990A (AMBAC Insured)                                               7.00          2017         3,000,000        3,343,230  
North City West Community School Facility                                                                                           
  Authority Special Tax                                                                                                             
  Refunding Revenue Bonds Series 1995B (CGIC Insured)                        5.75          2015         1,000,000        1,008,370  
Northern California Public Power Authority Power                                                                                    
  Pre-Refunded Revenue Bonds Hydroelectric                                                                                          
  Series 1986B-3                                                             8.00          2024         2,000,000        2,123,160  
Northern California Public Power Authority Power                                                                                    
  Pre-Refunded Revenue Bonds Hydroelectric #1                                                                                       
  Series 1986B-1                                                             8.00          2024         2,100,000        2,229,318  
Northern California Transmission Agency                                                                                             
  California-Oregon Transmission                                                                                                    
  Pre-Refunded Revenue Bonds                                                                                                        
  Series 1990A (MBIA Insured)                                                7.00          2024         2,000,000        2,201,100  
Northern California Transmission                                                                                                    
  Select Auction Variable Rate Security &                                                                                           
  Residual Interest Revenue Bonds Inverse Floater                                                                                   
  (MBIA Insured)                                                             5.50          2024        4,500,000(f)      4,321,575  
Novato Community Facility District #1 Vintage Oaks                                                                                  
  Public Improvement Special Tax Refunding Bonds                             7.25          2021         2,000,000        2,092,540  
Pleasanton Joint Powers Financing Authority Reassessment                                                                            
  Revenue Bonds Series 1993A                                                 6.15          2012         1,895,000        1,952,513  
Port of Oakland Revenue Bonds                                                                                                       
  Series 1989A (BIG Insured) A.M.T.                                          7.60          2016           500,000          515,655  
Rancho Cucamonga Redevelopment Agency                                                                                               
  1990 Tax Allocation Pre-Refunded Bonds                                                                                            
  (MBIA Insured)                                                             7.125         2019         3,540,000        3,879,309  
Rancho Mirage Joint Powers Finance Authority                                                                                        
  Certificate of Participation Eisenhower Memorial Hospital                  7.00          2022         4,250,000        4,601,135  
Redding Redevelopment Agency Tax Allocation                                                                                         
  Refunding Bonds Canby Hilltop Cypress                                                                                             
  Series D (CGIC Insured)                                                    5.00          2023         4,700,000        4,245,463  
Richmond Elementary School District                                                                                                 
  Lassen County General Obligation Bonds                                                                                            
  Series 1996 Election Bank Qualified                                        6.50          2021           649,000          648,955  
Richmond Joint Powers Financing Authority Leases and                                                                                
  Gas Tax Refunding Revenue Bonds Series 1995A                               5.25          2013         3,540,000        3,332,131  
Sacramento Cogeneration Authority                                                                                                   
  Cogeneration Revenue Bonds                                                                                                        
  Procter & Gamble Series 1995                                               6.375         2010         1,000,000        1,044,750  
Sacramento Municipal Utility District Series R                               6.00       2015-17         7,500,000        7,501,020  
Sacramento Municipal Utility District Pre-Refunded Series V                  7.50          2018         2,775,000        2,937,587  
Sacramento Municipal Utility District Pre-Refunded Series W                  7.50          2018         1,980,000        2,096,008  
Sacramento Municipal Utility District Pre-Refunded Series Y                                                                         
  (MBIA Insured)                                                             6.75          2019         3,400,000        3,805,858  
Sacramento Power Authority Cogeneration                                                                                             
  Revenue Bonds Series 1995                                                  6.00          2022         1,000,000        1,002,470  
San Diego County Capital Asset Lease                                                                                                
  Certificate of Participation                                                                                                      
  Series 1993 Inverse Floater (AMBAC Insured)                                7.27          2007        3,200,000(f)      3,448,000  
San Diego Regional Transportation Commission Sales Tax                                                                              
  Pre-Refunded Revenue Bonds Limited Tax Series 1989A                        6.25          2008         5,030,000        5,274,156  
San Joaquin County Pre-Refunded Certificate of Participation                                                                        
  Human Services Facility Series 1989 (BIG Insured)                          6.70          2009         3,500,000        3,776,605  
San Joaquin County Certificate of Participation                                                                                     
  Jail & Sheriffs Operation Center (MBIA Insured)                            6.75          2015         2,000,000        2,181,420  
San Jose Redevelopment Agency Merged Area                                                                                           
  RedevelopmentTax Allocation Bonds                                                                                                 
  Series 1993 (MBIA Insured)                                                 4.75          2024         3,055,000        2,649,938  
San Jose Redevelopment Agency Merged Area                                                                                           
  Tax Allocation Bonds Series 1993 Inverse Floater                                                                                  
  (MBIA Insured)                                                             6.627         2014        3,000,000(f)      2,838,750  
San Mateo County Transit District Limited Tax                                                                                       
  Pre-Refunded Bonds Series 1990A (MBIA Insured)                             6.50          2020         1,500,000        1,590,825  
Santa Clara County Mountain View-                                                                                                   
  Los Altos Union High School District Unlimited Tax                                                                                
  General Obligation Bonds Series A                                          5.75          2015         1,200,000        1,209,396  
Santa Cruz Certificate of Participation                                      8.375         2007         1,220,000        1,270,398  
Southern California Home Financing Authority                                                                                        
  Single Family Mortgage Revenue Bonds 1990B                                                                                        
  (GNMA Insured) A.M.T.                                                      7.75          2024           575,000          608,488  
Southern California Public Power Authority Transmission                                                                             
  Special Bonds                                                              6.00          2012         2,700,000        2,765,367  
South Tahoe Joint Powers Financing Authority                                                                                        
  Refunding Revenue Bonds Series 1995B                                       6.25          2020         2,700,000        2,722,815  
State Department Water Resources Water System                                                                                       
  Pre-Refunded Revenue Bonds Central Valley                                                                                         
  Series D                                                                   7.70          2024         2,400,000        2,527,080  
State Department Water Resource Water System                                                                                        
  Revenue Bonds Central Valley Project Series L                              5.50          2023         3,000,000        2,929,860  
State Education Facility Authority Revenue Bonds                                                                                    
  Pomona College                                                             6.00          2017         3,000,000        3,064,170  
State Health Facility Finance Authority Pre-Refunded                                                                                
  Revenue Bonds St. Joseph Health System Series 1989A                        6.90          2014         3,500,000        3,792,985  
State Housing Finance Agency Home Mortgage Revenue Bonds                                                                            
  Series 1986B                                                               6.90          2016         1,990,000        2,032,526  
State Pollution Control Finance Authority Pollution Control                                                                         
  Revenue Bonds Southern California Edison                                                                                          
  Series 1988A A.M.T.                                                        6.90          2006         2,000,000        2,133,580  
State Public Works Board Lease Revenue Bonds                                                                                        
  California Community Colleges Series 1994B                                 7.00          2019         2,000,000        2,336,340  
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        1,786,542  
State Public Works Board University of California Lease                                                                             
  Pre-Refunded Revenue Bonds Series 1990A                                    7.00          2015         2,250,000        2,503,755  
State Unlimited Tax General Obligation Bonds                                                                                        
  (Secondary FGIC Insured)                                                   4.75          2023        1,325,000(g)      1,151,769  
Statewide Community Development Authority                                                                                           
  Certificate of Participation Sutter Health Group                                                                                  
  (MBIA Insured)                                                             5.50          2022         1,000,000          974,470  
Statewide Community Development Authority                                                                                           
  Health Facilities Revenue Bonds                                                                                                   
  Unihealth America Series 1993A                                                                                                    
  Inverse Floater (AMBAC Insured)                                            7.519         2011        5,000,000(f)      5,300,000  
Statewide Community Development Authority Revenue                                                                                   
  Certificate of Participation                                                                                                      
  St. Joseph Health System Group                                             6.50          2015         5,500,000        5,902,765  
Stockton Single Family Mortgage Revenue Bonds                                                                                       
  Series 1990A (GNMA Insured) A.M.T.                                         7.50          2023           110,000          115,710  
University of Southern California Educational                                                                                       
  Facilities Authority Pre-Refunded Revenue Bonds                                                                                   
  Series 1989B                                                               6.75          2015         5,000,000        5,397,650  
Upland Certificate of Participation Water System                                                                                    
  Refunding Bonds (FGIC Insured)                                             6.60          2016         1,000,000        1,091,210  
Vacaville Limited Obligation Improvement Bonds                                                                                      
  Water Rights Assessment District                                           8.00          2007           750,000          773,963  
Watsonville Solid Waste Resource Recovery                                                                                           
  Revenue Bonds Series 1996 (MBIA Insured)                                   5.50          2016         1,775,000        1,758,191  
----------------------------------------------------------------------------------------------------------------------------------- 
Total municipal bonds                                                                                                               
(Cost: $ 219,816,196)                                                                                               $  239,704,961  
----------------------------------------------------------------------------------------------------------------------------------- 
Total investments in securities                                                                                                     
(Cost: $219,816,196)(i)                                                                                             $  239,704,961  
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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,    
area as follows:                                                                
                                                 (Unaudited)
Rating                                          12-31-96                6-30-96 
--------------------------------------------------------------------------------
AAA                                               60%                      59%  
AA                                                19                       19   
A                                                 11                       13   
BBB                                                7                        7   
BB and below                                       3                        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           
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 Dec. 31, 1996, the value of
                  securities subject to alternative minimum tax represented 6.1%
of net assets.                              
(e) For those zero coupon bonds that 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 Dec. 31, 1996. Inverse floaters in the aggregate
represent 6.5% of the Fund's net assets as of Dec. 31, 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 March 1997                  $3,200,000            
------------------------------------------------------------            

(h)  For zero coupon bonds, the interest rate disclosed represents the          
annualized effective yield on the date of acquisition.                
(i)  At Dec.31, 1996, the cost of securities for federal income tax purposes was
   approximately $219,583,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:                 

Unrealized appreciation                          $20,312,000            
Unrealized depreciation                             (190,000)           
----------------------------------------------------------------------  
Net unrealized appreciation                     $ 20,122,000            
----------------------------------------------------------------------  

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                                                        [Enlarge/Download Table]

Investments in securities                                                                                                           

IDS Massachusetts Tax-Exempt Fund                                                                    (Percentages represent value of
Dec. 31, 1996 (Unaudited)                                                                        investments compared to net assets)
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Municipal bonds (97.6%)                                                                                                             
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Name of issuer                                                                                                                      

and title of issue (b,c,d)                                                      Coupon   Maturity      Principal            Value(a)
                                                                                  rate       year         amount                    

                                                                                                                                    
Bay Transit Authority Series A (Secondary CGIC Insured)                           5.50 %    2021      $  500,000          $  484,375
Bay Transportation Authority General Transportation System                                                                          
  Refunding Bonds Series 1992B                                                    6.20      2016       1,500,000           1,627,020
Boston City Hospital Refunding Revenue Bonds                                                                                        
  Series B (FHA Insured)                                                          5.75      2023       3,000,000 (f)       2,901,450
Boston City Hospital Pre-Refunded Revenue Bonds                                                                                     
  Series A (FHA Insured)                                                          7.625     2021       1,000,000           1,126,780
Boston General Obligation Bonds                                                                                                     
  Series 1991A (MBIA Insured)                                                     6.75      2011         500,000             555,505
Boston General Obligation Refunding Bonds                                                                                           
  Series 1993A (AMBAC Insured)                                                    5.65      2009       1,500,000 (f)       1,543,020
Boston Industrial Development Financing Authority                                                                                   
  Revenue Bonds Massachusetts College of Pharmacy                                                                                   
  Series 1993A (Connie Lee Insured)                                               5.25      2026       1,000,000             923,710
Boston Water & Sewer Commission                                                                                                     
  General Pre-Refunded Revenue Bonds                                                                                                
  Senior Series 1991A (FGIC Insured)                                              7.00      2018       1,000,000           1,127,750
Boston Water & Sewer Commission                                                                                                     
  General Subordinate Revenue Bonds Series A                                                                                        
  (MBIA Insured)                                                                  6.00      2008         500,000             508,880
Commonwealth General Obligation Consolidated Loan                                                                                   
  Pre-Refunded Bonds                                                                                                                
  Series 1990A (FGIC Insured)                                                     7.25      2009         500,000             552,610
Fall River General Obligation Refunding Bonds                                                                                       
  Series 1996 (MBIA Insured)                                                      5.25      2010       1,000,000             981,090
Greater Lawrence Sanitary District North Andover                                                                                    
  General Obligation Bonds                                                        8.50      2005         510,000             533,664
Health & Educational Facilities Authority Refunding                                                                                 
  Revenue Bonds Beth Israel Hospital Series 1989E                                 7.00     2009-14       550,000             585,445
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Berkshire Health Systems Series A (MBIA Insured)                                7.50      2008         500,000             539,110
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Berkshire Health Systems Series C                                               5.90      2011       1,000,000             956,280
Health & Educational Facilities Authority Pre-Refunded                                                                              
  Revenue Bonds Beverly Hospital Series D (MBIA Insured)                          7.30      2019         400,000             436,648
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Boston College Series J (FGIC Insured)                                          6.625     2021       2,000,000           2,174,220
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Boston College Series K                                                         5.25      2023       1,000,000             936,300
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Brigham & Women's Hospital Series C                                             6.75      2021         500,000             526,075
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Brigham & Women's Hospital Series 1991D                                         6.75      2024       1,000,000           1,071,110
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Cape Cod Health System Series A (Connie Lee Insured)                            5.25      2021       2,500,000           2,329,250

See accompanying notes to investments in securities.                                                                                
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Charlton Memorial Hospital Series 1991B                                         7.25      2013       1,750,000           1,892,223
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Cooley Dickinson Hospital Issue (AMBAC Insured)                                 5.50      2025       1,250,000           1,209,550
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Holyoke Hospital Series B                                                       6.50      2015       1,000,000             986,570
Health & Educational Facilities Authority Pre-Refunded                                                                              
  Revenue Bonds Lahey Clinic Medical Center                                                                                         
  Series A (MBIA Insured)                                                         7.625     2018         500,000             536,320
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Lahey Clinic Medical Center Series B (MBIA Insured)                             5.625     2015       1,000,000             985,880
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Melrose-Wakefield Hospital Series 1992B                                         6.375     2016       1,000,000           1,027,850
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Morton Hospital & Medical Center                                                                                                  
  Series B (Connie Lee Insured)                                                   5.25      2014       1,000,000             958,050
Health & Educational Facilities Authority                                                                                           
  Pre-Refunded Revenue Bonds Mount Auburn Hospital                                                                                  
  Series A (MBIA Insured)                                                         7.875     2018         205,000             220,615
Health & Educational Facilities Authority Revenue Bonds                                                                             
  New England Deaconess Hospital Series 1992D                                     6.625     2012       1,000,000           1,051,770
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Newton Wellesley Hospital Series 1991D (MBIA Insured)                           7.00      2015       1,000,000           1,105,970
Health & Educational Facilities Authority                                                                                           
  Pre-Refunded Revenue Bonds Northeastern University                                                                                
  Series 1989C (AMBAC Insured)                                                    7.10      2006       1,000,000           1,082,520
Health & Educational Facilities Authority                                                                                           
  Pre-Refunded Revenue Bonds Northeastern University                                                                                
  Series E (MBIA Insured)                                                         6.55      2022       1,000,000           1,096,330
Health & Educational Facilities Authority Revenue Bonds                                                                             
  North Adams Regional Hospital Series 1                                          6.625     2018       1,000,000           1,002,390
Health & Educational Facilities Authority Revenue Bonds                                                                             
  South Shore Hospital Series 1992D (MBIA Insured)                                6.50      2022       1,000,000           1,075,580
Health & Educational Facilities Authority                                                                                           
  Pre-Refunded Revenue Bonds                                                                                                        
  Stonehill College Series 1990D (AMBAC Insured)                                  7.70      2020       1,000,000           1,127,320
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Suffolk University Series B (Connie Lee Insured)                                6.35      2022       2,495,000           2,627,035
Health & Educational Facilities Authority                                                                                           
  Pre-Refunded Revenue Bonds                                                                                                        
  Wentworth Institute of Technology                                                                                                 
  Series A (AMBAC Insured)                                                        7.40      2010        750,000              833,663
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Valley Regional Health System                                                                                                     
  Series C (Connie Lee Insured)                                                   5.75      2018       1,000,000             998,780
Health & Educational Facilities Authority Revenue Bonds                                                                             
  Wentworth Institute of Technology                                                                                                 
  Series B (Connie Lee Insured)                                                   5.50      2023       1,500,000           1,411,380
Industrial Finance Agency Assumption College Revenue Bonds                                                                          
  Series 1996 (Connie Lee Insured)                                                6.00      2026       1,000,000           1,024,210
Industrial Finance Agency Pollution Control                                                                                         
  Refunding Revenue Bonds                                                                                                           
  Eastern Edison Series 1993                                                      5.875     2008       2,000,000           1,961,580
Industrial Finance Agency Resource Recovery Revenue Bonds                                                                           
  Ogden Haverhill Series 1986A (AMBAC Insured) A.M.T.                             7.375     2011         175,000             179,011
Industrial Finance Agency Resource Recovery Revenue Bonds                                                                           
  SEMASS Series 1991A                                                             9.00      2015       1,500,000           1,671,120
Industrial Finance Agency Revenue Bonds                                                                                             
  Museum of Science                                                                                                                 
  Series 1989 (FSA Insured)                                                       7.30      2009       1,000,000           1,100,830
Leominster General Obligation Bonds (MBIA Insured)                                7.50      2009       1,000,000           1,113,260
Mansfield General Obligation Bonds (AMBAC Insured)                                6.70      2011       1,000,000           1,094,690
Municipal Wholesale Electric Power Supply System                                                                                    
  Pre-Refunded Revenue Bonds Series 1992B                                         6.75      2017       1,395,000           1,566,822
Municipal Wholesale Electric Power Supply System                                                                                    
  Refunding Revenue Bonds Series B (MBIA Insured)                                 4.75      2011       1,750,000           1,605,258
Municipal Wholesale Electric Power                                                                                                  
  Supply System Revenue Bonds                                                                                                       
  Special Pars & Inflows (AMBAC Insured)                                          5.45      2018       1,600,000           1,527,920
Nantucket General Obligation Bonds                                                6.80      2011       1,000,000           1,094,160
New Bedford General Obligation Bonds                                                                                                
  Series 1995 (AMBAC Insured)                                                     5.50      2015         700,000             690,263
North Andover General Obligation Bonds (MBIA Insured)                             7.35      2008         310,000             346,003
Port Authority Revenue Bonds                                                                                                        
  Series 1990A (FGIC Insured) A.M.T.                                              7.50      2020       1,000,000           1,100,260
Southeastern University Building Refunding Revenue Bonds                                                                            
  Series A (AMBAC Insured)                                                        5.75      2016       1,250,000           1,264,450
Southern Berkshire Regional School District Unlimited Tax                                                                           
  General Obligation Pre-Refunded Bonds (AMBAC Insured)                           7.55      2010       1,000,000           1,117,000
State Education Loan Authority                                                                                                      
  Educational Loan Revenue Bonds                                                                                                    
  Issue E Series B (AMBAC Insured) A.M.T.                                         6.00      2012       1,000,000           1,025,460
State General Obligation Consolidated Loan Bonds                                                                                    
  Series 1991A (FGIC Insured)                                                     6.00      2011       1,095,000           1,164,138
State Housing Finance Agency Single Family Housing                                                                                  
  Revenue Bonds Series 13 A.M.T.                                                  7.95      2023         475,000             508,022
State Housing Finance Authority Residential                                                                                         
  Development Bonds Series 1992A (FNMA Insured)                                   6.875     2011       1,000,000           1,065,550
State Housing Finance Authority                                                                                                     
  Single Family Mortgage Housing Revenue Bonds Series 4                           7.375     2014         430,000 (f)         441,038
State Housing Finance Authority                                                                                                     
   Single Family Mortgage Housing Revenue Bonds Series 7 A.M.T.                   8.10      2020         245,000             255,109
State Water Resource Authority Revenue Bonds                                                                                        
  Series A (Secondary MBIA Insured)                                               5.50      2022       1,100,000           1,060,532
University of Lowell Building Authority Facilities Revenue Bonds                                                                    
  4th Series A                                                                    7.40      2007         125,000             131,317
University of Lowell Building Authority Facilities Revenue Bonds                                                                    
  4th Series A                                                                    7.60      2012          50,000              52,608
University of Massachusetts Building Authority Revenue Bonds                                                                        
  Series A (FSA Insured)                                                          7.50      2014         500,000             533,480
University of Massachusetts Building Authority Revenue Bonds                                                                        
  Series A Escrowed to Maturity                                                   7.50      2011         120,000             135,936
Water Resource Authority General Pre-Refunded Revenue Bonds                                                                         
  Series 1990A                                                                    7.625     2014         500,000             559,155
Water Resource Authority General Pre-Refunded Revenue Bonds                                                                         
  Series 1991A                                                                    6.50      2019       1,000,000           1,108,040
Water Resource Authority General Revenue Bonds                                                                                      
  Series 1993B (MBIA Insured)                                                     5.00      2022       1,365,000           1,238,000
Water Resource Authority General Revenue Bonds                                                                                      
  Series 1993C                                                                    5.25      2020       1,400,000           1,309,560
Worcester General Obligation Refunding Bonds                                                                                        
  Series 1995G (MBIA Insured)                                                     5.30      2015       1,000,000             974,700

------------------------------------------------------------------------------------------------------------------------------------
Total municipal bonds                                                                                                               
(Cost: $69,082,326)                                                                                                      $73,669,570
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Short-term security (0.4%)                                                      
--------------------------------------------------------------------------------
Issuer (d,e)                    Effective             Amount            Value(a)
                yield         payable at
                                maturity
--------------------------------------------------------------------------------
Municipal note                                                                  
State General Obligation Series B V.R.                                          
 12-01-97                          4.80%           $300,000           $300,000
--------------------------------------------------------------------------------
Total short-term security                                                       
(Cost: $300,000)                                                       $300,000 
--------------------------------------------------------------------------------
Total investments in securities                                                 
(Cost: $69,382,326)(g)                                              $73,969,570 
--------------------------------------------------------------------------------
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                              12-31-96                       06-30-96
--------------------------------------------------------------------------------
   AAA                                      66%                            66%
  AA                                        9                              9
  A                                        15                             16
  BBB                                       8                              7
  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             
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:             
AMT      -- Alternative Minimum Tax -- As of Dec. 31, 1996, the value of
             securities subject to alternative tax represented 4.1% of net
assets.                                         
V.R. -- Variable Rate                                                   
(e) The Fund is entitled to receive principal amount from issuer or corporate   
   guarantor, if indicated in parenthesis, after a day or a week's notice. The
   maturity date disclosed represents the final maturity. Interest rate varies
 to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 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 March 1997                                       $900,000 
--------------------------------------------------------------------------------

(g) At Dec. 31, 1996, the cost of securities for federal income tax purposes was
approximately $69,334,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:                   

Unrealized appreciation                                              $4,841,000 
Unrealized depreciation                                                (205,000)
--------------------------------------------------------------------------------
Net unrealized appreciation                                          $4,636,000 
--------------------------------------------------------------------------------

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Investments in securities                                                                                                           

IDS Michigan Tax-Exempt Fund                                                                         (Percentages represent value of
Dec. 31, 1996 (Unaudited)                                                                        investments compared to net assets)
------------------------------------------------------------------------------------------------------------------------------------

Municipal bonds (98.2%)                                                                                                             
------------------------------------------------------------------------------------------------------------------------------------


Name of issuer and                                                              Coupon  Maturity       Principal           Value(a) 
title of issue (b,c,d)                                                            rate      year          amount                    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Albion Public School District Unlimited Tax General Obligation Bonds             5.125%     2021      $1,000,000         $   923,380
Auburn Hills Limited Tax General Obligation                                                                                         
  Street Improvement Bonds                                                        6.00      2004         200,000 (f)         207,040
Battle Creek Calhoun County                                                                                                         
  Downtown Development Authority Bonds Series 1994                                7.65      2022       1,250,000           1,418,112
Battle Creek Water Supply System                                                                                                    
  Pre-Refunded Revenue Bonds Series 1990B                                         6.375    2008-10     1,640,000           1,733,234
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)       1,688,145
Chelsea General Pre-Refunded Obligation Bonds (MBIA Insured)                      8.20      2006         145,000             154,212
Comstock Park Public School Kent County Unlimited Tax                                                                               
  General Obligation Pre-Refunded Bonds Series 1989                               6.00      2016         400,000             422,896
Comstock Park Public School Kent County Unlimited Tax                                                                               
  General Obligation Pre-Refunded Bonds Series 1989                               6.875     2010         260,000             279,885
Detroit General Obligation Pre-Refunded Bonds                                                                                       
  Distributable State Aid Series 1989 (AMBAC Insured)                             7.20      2009       1,000,000           1,085,730
Detroit Sewer Disposal Pre-Refunded Revenue Bonds                                 8.00      2008         500,000             520,705
Detroit Sewer Disposal Revenue Bonds                                                                                                
  (FGIC Insured)                                                                  5.70      2023       2,000,000 (f)       1,967,780
Detroit Unlimited Tax General Obligation Bonds Pre-Refunded Series A              7.25      2009       1,000,000           1,082,730
Detroit Unlimited Tax General Obligation Bonds Pre-Refunded Series A              8.625     2007         100,000             103,200
Detroit Unlimited Tax General Obligation Bonds Pre-Refunded Series 1988A          7.875     2008         700,000             746,592
Detroit Unlimited Tax General Obligation Bonds Series A (FGIC Insured)            5.50      2016       1,000,000             979,000
Detroit Unlimited Tax General Obligation Bonds Series 1995A                       6.80      2015       1,000,000           1,135,010
Detroit Downtown Development Authority Development Area                                                                             
  Project #1 Tax Increment Series 1996D                                                                                             
  (Junior Lien)                                                                   6.50      2025       1,000,000           1,022,760
Detroit Water Supply System Revenue Second Lien                                                                                     
  Bonds Series 1995A (MBIA Insured)                                               5.50      2025       1,500,000           1,472,475
Detroit Water Supply System Pre-Refunded Revenue Bonds                                                                              
  Series 1988 (MBIA Insured)                                                      7.875     2008         400,000             430,592
East Lansing School District School Building & Site                                                                                 
  Unlimited Tax General Obligation Pre-Refunded Bonds Series 1991                 6.625     2014       1,000,000           1,100,270
Farmington Hills Hospital Finance Authority                                                                                         
  Revenue Bonds Botsford General Hospital                                                                                           
  Series 1992A (MBIA Insured)                                                     6.50      2022       1,500,000           1,608,255
Ferris State University Board of Trustees                                                                                           
  General Revenue & Refunding Bonds                                                                                                 
  Series 1995 (MBIA Insured)                                                      5.25      2020       1,000,000             949,210
Forest Hills School District Unlimited Tax                                                                                          
  General Obligation Pre-Refunded Bonds                                           7.375     2015       1,000,000           1,101,500
Frenchtown Resort Drainage District Monroe County Drain                                                                             
  Pre-Refunded Revenue Bonds Series 1987                                          7.50     2011-12       615,000             669,624

See accompanying notes to investments in securities.                                                                                

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Garden City School District Authority                                                                                               
  Pre-Refunded Revenue Bonds                                                      7.80      2010         305,000             329,537
Genesee County General Obligation Bonds Sewer Disposal System                                                                       
  Series A (AMBAC Insured)                                                        5.40      2015       1,400,000           1,372,826
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           1,926,400
Grand Rapids Community College Limited Tax General Obligation Bonds                                                                 
  Series 1996 (MBIA Insured)                                                      5.375     2019       1,000,000             971,440
Grand Rapids Tax Increment Revenue Bonds                                                                                            
  Series 1994 (MBIA Insured)                                                      6.875     2024         380,000             425,927
Grand Rapids Water Supply System Improvement                                                                                        
  Pre-Refunded Revenue Bonds Series 1988                                          7.875     2018         700,000             742,028
Grand Rapids Water Supply System Improvement                                                                                        
  Pre-Refunded Revenue Bonds Series 1990 (FGIC Insured)                           7.25      2020       1,250,000           1,375,875
Inkster School District Unlimited Tax General Obligation                                                                            
  Pre-Refunded Bonds (AMBAC Insured)                                              7.00      2018         450,000             493,034
Isoco County Water Supply System Limited Tax                                                                                        
  General Obligation Bonds (AMBAC Insured)                                        5.50     2008-10       575,000             588,831
Kent County Hospital Pre-Refunded Revenue Bonds                                                                                     
  Butterworth Hospital Series 1989A                                               7.25      2013         500,000             539,975
Kent County Refuse Disposal System Limited Tax                                                                                      
  General Obligation Refunding Bonds Series 1987                                  8.40      2010         150,000             158,292
Lake Orion School District General Obligation Bonds                                                                                 
  (AMBAC Insured)                                                                 5.50      2020       1,000,000             983,150
Lincoln Park School Distict Wayne County School Building & Site                                                                     
  Unlimited Tax General Obligation Bonds (FGIC Insured)                           5.90      2026       1,000,000           1,025,680
Marquette Hospital Finance Authority Pre-Refunded Revenue Bonds                                                                     
  Marquette General Hospital Series 1989C                                         7.50     2007-19       825,000             898,565
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           1,704,314
Monroe County Pollution Control Revenue Bonds Detroit Edison                                                                        
  Fermi Plants Series 1990I (FGIC Insured) A.M.T.                                 7.65      2020       1,000,000           1,108,630
Monroe County Pollution Control Revenue Bonds Detroit Edison                                                                        
  Fermi 2 Plants Series CC (AMBAC Insured) A.M.T.                                 7.50      2019       1,750,000           1,932,420
Muskegon Hospital Finance Authority Refunding Revenue Bonds                                                                         
  Hackley Hospital Series 1988A                                                   8.00      2008         400,000             420,188
Northville Public Schools Unlimited Tax                                                                                             
  General Obligation Bonds Series 1991B                                           7.00      2008       1,500,000           1,666,365
Ovid-Elsie School District Unlimited Tax                                                                                            
  General Obligation Bonds (Secondary MBIA Insured)                               5.60      2021       1,000,000             986,840
Redford General Obligation Bonds (MBIA Insured)                                   5.25      2016       1,450,000           1,400,483
Richmond Limited Obligation Refunding Revenue Bonds                                                                                 
  K mart Series A                                                                 6.625     2007         530,000             528,659
Rochester Hill Unlimited Tax General Obligation Bonds                                                                               
  Series 1990A                                                                    6.00     2009-10       735,000             757,667
Rockford Public Schools Kent County Unlimited Tax                                                                                   
  General Obligation Pre-Refunded Revenue Bonds                                   7.375     2019       1,000,000           1,101,500
Romulus Township School District Unlimited Tax                                                                                      
  General Obligation Refunding Bonds (FGIC Insured)                               5.75      2022       2,500,000           2,512,925
St. Louis Public Schools Unlimited Tax                                                                                              
  General Obligation Refunding Revenue Bonds                                                                                        
  Counties of Gratiot, Midland & Isabella Series 1995 (FGIC Insured)              5.25      2024         755,000             717,167
Schoolcraft Community School District County of Kalamazoo School Building                                                           
  and Site Unlimited General Obligation Bonds Series 1996 (FGIC Insured)          5.375     2026       1,000,000             964,900
South Lake District Unlimited Tax General Obligation Pre-Refunded Bonds           6.80      2010         355,000             392,516
South Redford School District Unlimited General Obligation Bonds                                                                    
  Series 1996 (FGIC Insured)                                                      5.50      2022       1,000,000             982,480
State Building Authority Refunding Revenue Bonds Series 1991I                     6.25      2020       2,200,000           2,277,990
State Hospital Finance Authority Revenue Bonds                                                                                      

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  St. Johns Hospital & Medical Center (AMBAC Insured)                             5.25      2026       1,400,000           1,331,610
State Hospital Finance Authority Revenue Bonds                                                                                      
  Central Michigan Community Hospital                                             6.25      2027       1,000,000             984,040
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds                                                                
  Detroit Medical Center Series 1988A                                             8.125     2012         310,000             335,417
State Hospital Finance Authority Hospital Pre-Refunded Revenue Bonds                                                                
  McLaren Obligated Group Series 1991A                                            7.50      2021       1,750,000           2,000,233
State Hospital Finance Authority Hospital Refunding Revenue Bonds                                                                   
  Detroit Medical Center Series A                                                 6.25      2013       1,200,000           1,234,500
State Hospital Finance Authority Hospital Refunding Revenue Bonds                                                                   
  Detroit Medical Center Series 1988A                                             8.125     2012          90,000              96,261
State Hospital Finance Authority Hospital Refunding Revenue Bonds                                                                   
  Detroit Medical Center Pre-Refunded Series 1988B                                8.00      2008         500,000             540,040
State Hospital Finance Authority Hospital Refunding Revenue Bonds                                                                   
  Sinai Hospital of Greater Detroit Series 1995                                   6.70      2026       1,000,000           1,011,010
State Hospital Finance Authority Pre-Refunded Revenue Bonds                                                                         
  Oakwood Hospital Group Series 1990A (FGIC Insured)                              7.10      2018       1,000,000           1,105,600
State Hospital Finance Authority Pre-Refunded Revenue Bonds                                                                         
  Henry Ford Hospital Series 1990A                                                7.00      2010       1,000,000           1,102,380
State Hospital Finance Authority Revenue Bonds                                                                                      
  Presbyterian Villages of Michigan Obligated Group                                                                                 
  Series 1995                                                                     6.50      2025       1,000,000           1,006,400
State Public Power Agency Belle River                                                                                               
  Refunding Revenue Bonds Series A                                                5.25      2018       1,000,000             937,170
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds                                                                 
  Detroit Edison Series 1990BB (MBIA Insured)                                     7.00      2008       1,000,000           1,162,260
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds                                                                 
  Detroit Edison Series 1992BB (FGIC Insured)                                     6.50      2016       1,500,000           1,613,865
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds                                                                 
  Escrowed to Maturity Oxford Institute                                           7.875     2005         150,000             170,553
State Strategic Fund Limited Tax Obligation Refunding Revenue Bonds                                                                 
  Ford Motor Series 1991A                                                         7.10      2006       1,650,000 (f)       1,890,669
State Strategic Fund Limited Tax Obligation Revenue Bonds                                                                           
  Great Lakes Pulp & Fibre A.M.T.                                                10.25      2016       1,000,000             567,490
State Trunk Line Bonds Series A (FGIC Insured)                                    5.75      2020       1,065,000           1,071,294
State University Revenue Bonds Series A                                           5.50      2022         560,000             537,690
Taylor Tax Increment Finance Authority Bonds                                                                                        
  Series 1989A (MBIA Insured)                                                     6.00     2007-09     1,205,000           1,232,267
Troy City Downtown Development Authority County of Oakland                                                                          
  Development Bonds Series 1995A (Asset Guaranty)                                 6.375     2018       1,500,000           1,583,340
Van Buren Township Tax Increment Revenue Bonds                                                                                      
  Series 1994                                                                     8.40      2016       1,000,000           1,126,920
Waterford School District Unlimited Tax General Obligation Bonds                                                                    
  Series Q                                                                        6.25      2013         340,000             352,777
Wayne County Airport Revenue Bonds Detroit Metropolitan Airport                                                                     
  Series 1990A (AMBAC Insured) A.M.T.                                             7.00      2020       1,080,000           1,180,580
Willow Run Community Schools Unlimited General Obligation Refunding Bonds                                                           
  Series 1996 (AMBAC Insured)                                                     5.00      2016       2,000,000           1,872,680
Wyandotte Electric Pre-Refunded Revenue Bonds                                                                                       
  Series 1987 (AMBAC Insured)                                                     7.875     2017         300,000             315,441
------------------------------------------------------------------------------------------------------------------------------------
Total municipal bonds                                                                                                               
(Cost: $74,381,261)                                                                                                      $80,451,428
------------------------------------------------------------------------------------------------------------------------------------


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Short-term security (0.2%)                                                      
--------------------------------------------------------------------------------
Issuer (d,e)                     Effective             Amount           Value(a)
                  yield         payable at
                                  maturity
--------------------------------------------------------------------------------
Municipal note                                                                  
State Strategic Fund Consumer Power Company                                     
Series 1988A V.R.                                                           
  04-15-18                            4.95%          $200,000        $   200,000
--------------------------------------------------------------------------------
Total short-term security                                                       
(Cost: $200,000)                                                     $   200,000
--------------------------------------------------------------------------------
Total investments in securities                                                 
(Cost: $74,581,261)(g)                                               $80,651,428
--------------------------------------------------------------------------------

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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                                 12-31-96                     06-30-96
    ----------------------------------------------------------------------------
    AAA                                         73%                          71%
   AA                                          11                           12
   A                                            5                            6
   BBB                                         10                            9
   BB and below                                 1                            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:             
 A.M.T.     -- Alternative Minimum Tax - As of Dec. 31, 1996, the value of
             securities subject to alternative minimum tax represented
5.8% of net assets.                         
V.R.       -- Variable Rate                                             
(e) The Fund is entitled to receive principal amount from issuer or corporate   
   guarantor, if indicated in parenthesis, after a day or a week's notice. The
    marturity date disclosed reporsents the final maturity. Interest rate varies
 to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 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 March 1997                                $1,000,000
  --------------------------------------------------------------------------

(g) At Dec. 31, 1996, the cost of securities for federal income tax purposes was
approximately $74,538,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:                   

  Unrealized appreciation                                         $6,548,000
   Unrealized depreciation                                           (435,000)
  --------------------------------------------------------------------------
  Net unrealized appreciation                                     $6,113,000
  --------------------------------------------------------------------------

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Investments in securities                                                                                                           
                                                                                                     (Percentages represent value of
IDS Minnesota Tax-Exempt Fund                                                                    investments compared to net assets)
Dec. 31, 1996 (Unaudited)                                                                                                           
------------------------------------------------------------------------------------------------------------------------------------

Municipal bonds (100.0%)                                                                                                            
------------------------------------------------------------------------------------------------------------------------------------

Name of issuer and                                                           Coupon     Maturity       Principal            Value(a)
title of issue (b,c,d)                                                         rate         year          amount                    
------------------------------------------------------------------------------------------------------------------------------------
Anoka County General Obligation Capital Improvement                                                                                 
                                                                                                                                    
  Revenue Bonds Series 1989B                                                   7.00 %     2007-10     $7,950,000          $8,329,374
Anoka County Resource Recovery Revenue Bonds                                                                                        
  Northern States Power Series 1985                                            7.15         2008       3,750,000           4,013,063
Becker Pollution Control Revenue Bonds                                                                                              
  Northern States Power Sherburne County                                                                                            
  Generating Station Units 1 & 2 Series 1987A                                  7.25         2005       2,000,000           2,004,500
Becker Solid Waste Disposal Facility                                                                                                
  Revenue Bonds Liberty Paper Series 1994B A.M.T.                              9.00         2015       3,825,000           4,029,791
Bemidji Hospital Facilities 1st Mortgage Revenue Bonds                                                                              
  North Country Health Services Series 1991                                    7.00         2021       1,755,000           1,967,776
Bloomington Community Development                                                                                                   
  Refunding Revenue Bonds Note 24th Avenue Motel                               8.50         2005       1,776,938           1,794,708
Brooklyn Center Tax Credit Investor Refunding Revenue Bonds                                                                         
  Four Courts Apartment Project Series 1995B A.M.T.                            7.58         2009       2,450,000           2,471,977
Burnsville Multi-family Housing                                                                                                     
  Refunding Revenue Bonds                                                                                                           
  FHA-Summit Park Apartments Series 1993                                       6.00         2033       4,000,000           4,015,840
Columbia Heights Multi-family Housing Revenue Bonds                                                                                 
  Crestview Lutheran Home Royce Place Series 1991                             10.00         2032         560,000             597,402
Columbia Heights Multi-family Housing Revenue Bonds                                                                                 
  Crestview Lutheran Home Royce Place                                                                                               
  Series 1991 (FHA Insured)                                                    7.75         2032       2,730,000           2,859,893
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           2,266,840
Duluth Hospital Facilities St. Lukes Hospital                                                                                       
  Pre-Refunded Revenue Bonds Series 1988                                       9.00         2018       2,500,000           2,712,575
Duluth Housing and Redevelopment Authority 1st Mortgage                                                                             
  Revenue Bonds Lakeshore Lutheran Home                                        8.25         2009         125,000             125,219
Eden Prairie Housing Development Refunding Revenue Bonds                                                                            
  Eden Commons Series 1990 (FHA Insured)                                       8.25         2025       6,230,000           6,377,215
Edina Hospital System Revenue Bonds                                                                                                 
  Fairview Hospital & Health Care Services                                                                                          
  Series 1989A                                                                 7.125        2019       2,500,000           2,667,000
Edina Multi-family Housing Revenue Bonds                                                                                            
  Walker Assisted Living Series 1991                                           9.00         2031       6,700,000           7,352,044
Faribault Rice & Goodhue County                                                                                                     
  Independent School District #656                                                                                                  
  General Obligation School Building Bonds                                                                                          
  Series 1995 (CGIC Insured)                                                   5.75         2015       6,900,000           7,016,127
Faribault Single Family Mortgage                                                                                                    
  Refunding Revenue Bonds Series 1991A                                         7.50         2011       1,985,000           2,080,359

See accompanying notes to investments in securities.                                                                                
Farmington Independent School District #192                                                                                         
   Unlimited General Obligation Bonds                                                                                               
   Series 1994 (AMBAC Insured)                                                 5.125        2015       1,000,000             956,230
Farmington Independent School District #192                                                                                         
   Series A (FSA Insured)                                                      5.30         2020       2,500,000           2,405,850
Fergus Falls Health Care Facilities Revenue Bonds                                                                                   
  LRHC Long-Term Care Facility Series 1995                                     6.50         2025       1,500,000           1,528,650
Hennepin County Lease Revenue                                                                                                       
  Certificate of Participation                                                                                                      
  Series 1991                                                                  6.80         2017       7,250,000           7,856,390
Hopkins Revenue Bonds Blake School                                             6.70         2024       3,120,000           3,439,457
Hubbard County Solid Waste Disposal Revenue Bonds                                                                                   
  Potlatch Series 1989 A.M.T.                                                  7.375        2013       5,610,000           5,996,529
International Falls Solid Waste Disposal                                                                                            
  Revenue Bonds Boise Cascade                                                                                                       
  Series 1990 A.M.T.                                                           7.75         2015       4,000,000           4,194,760
Little Canada Multi-family Housing Revenue Bonds                                                                                    
  Provinces of Little Canada                                                                                                        
  Series 1996 A.M.T.                                                           7.00         2027       3,885,000           3,846,189
Mahtomedi Multi-family Housing                                                                                                      
  Briarcliff Revenue Bonds A.M.T.                                              7.35         2036       2,290,000           2,330,487
Maplewood Care Institute Series 1994                                           7.75         2024       3,830,000           3,924,907
Maplewood Multi-family Housing                                                                                                      
  Revenue Bonds Maplewood (FHA Insured) A.M.T.                                 7.75         2021       2,060,000           2,075,944
Maplewood Multi-family Housing                                                                                                      
  Carefree Cottages of Maplewood III                                                                                                
  Refunding Revenue Bonds Series 1995 A.M.T.                                   7.20         2032       2,900,000           2,888,864
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           4,137,161
Minneapolis Community Development Agency                                                                                            
  Limited Tax Supported Development                                                                                                 
  Revenue Common Bond Fund                                                                                                          
  Series 1996-01                                                               6.00         2011         980,000             976,198
Minneapolis General Obligation Refunding Bonds                                                                                      
  Sports Arena Series 1996                                                     5.125        2020       4,000,000           3,822,520
Minneapolis General Obligation Bonds                                                                                                
  Sports Arena Series 1996                                                     5.20         2024       2,940,000           2,823,047
Minneapolis Hospital Facility                                                                                                       
  Pre-Refunded Revenue Bonds                                                                                                        
  Lifespan Incorporated Series 1987A                                           8.125        2017       3,630,000           3,742,530
Minneapolis Hospital Facility                                                                                                       
  Pre-Refunded Revenue Bonds                                                                                                        
  Lifespan Incorporated Series 1989A                                           7.00         2014       5,000,000           5,464,550
Minneapolis & St. Paul Housing &                                                                                                    
  Redevelopment Authority                                                                                                           
  Health Care System Revenue Bonds                                                                                                  
  Healthspan Series 1993 (AMBAC Insured)                                       4.75         2018      13,500,000          11,861,370
Minneapolis & St. Paul Housing &                                                                                                    
  Redevelopment Authority                                                                                                           
  Health Care System Revenue Bonds                                                                                                  
  Series 1995A (CGIC Insured)                                                  5.50         2025       2,500,000           2,443,450
Minneapolis Nursing Home Revenue Bonds                                                                                              
  Walker Cityview & Southview                                                                                                       
  Series 1992                                                                  8.50         2022       5,460,000           5,880,966
Minnetonka Multi-family Housing                                                                                                     
  Refunding Revenue Bonds Cedar Hill West                                                                                           
  (FHA Insured)                                                                7.75         2026       5,510,000           5,696,183
Minnetonka Multi-family Housing Revenue Bonds                                                                                       
  The Cedar Hills Series 1985 Inverse Floater                                  7.50         2017         500,000 (f)         518,005
New Brighton Tax Credit Investor Revenue Bonds                                                                                      
  Polynesian Village Apartments Series 1995B A.M.T.                            7.75         2009       2,355,000           2,399,133
North Branch School District                                                                                                        
   Unlimited Tax General Obligation Bonds                                                                                           
   Series 1995A (FGIC Insured)                                                 5.625        2017         500,000             499,080
Northern Municipal Power Agency Electric System                                                                                     
  Refunding Revenue Bonds                                                                                                           
  Series 1989A                                                                 7.25         2016       5,475,000           5,815,600
Northern Municipal Power Agency Electric System                                                                                     
  Pre-Refunded Revenue Bonds                                                                                                        
  Series 1989A (AMBAC Insured)                                                 7.40         2018       1,000,000           1,082,780
Northern Municipal Power Agency Electric System                                                                                     
  Pre-Refunded Revenue Bonds                                                                                                        
  Series 1989B (AMBAC Insured)                                                 7.40         2018       1,800,000           1,929,564
North St. Paul General Obligation School Bonds                                 5.125        2025       3,500,000           3,327,590
Owatanna Public Utilities                                                                                                           
  Pre-Refunded Revenue Bonds Series 1991                                       6.75         2016       1,000,000           1,085,720
Plymouth Multi-family Housing Revenue Bonds                                                                                         
  Harbor Lane Apartments Series 1993                                                                                                
  (Asset Guaranty Insured) A.M.T.                                              5.90         2013       2,325,000           2,335,742
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)       3,312,375
Richfield Independent School District #280                                                                                          
  Unlimited Tax General Obligation                                                                                                  
  School Building Bonds Series 1993C Trust                                                                                          
  Inverse Floater (FGIC Insured)                                               6.675        2012       2,510,000 (f)       2,525,688
Richfield Multi-family Housing                                                                                                      
   Refunding Revenue Bonds                                                                                                          
   Village Shores Apartments Project                                                                                                
   Series 1996                                                                 7.625        2031       3,000,000           3,037,680
Robbinsdale Hospital Pre-Refunded Revenue Bonds                                                                                     
  North Memorial Medical Center                                                                                                     
  Series 1989 (AMBAC Insured)                                                  7.375        2019       2,200,000           2,379,300
Robbinsdale Multi-family Housing Revenue Bonds                                                                                      
   Series 1996A A.M.T.                                                         7.35         2031       3,260,000           3,239,429
Rochester Health Care Facility Revenue Bonds                                                                                        
  Mayo Foundation Series A                                                     4.95         2019       5,000,000           4,465,750
Rochester Multi-family Housing Development                                                                                          
  Revenue Bonds Civic Square                                                                                                        
  Series 1991 (FHA Insured) A.M.T.                                             7.45         2031       4,400,000           4,656,564
Roseville Health Care Facility                                                                                                      
  Refunding Revenue Bonds                                                                                                           
  Presbyterian Homes of Minnesota Series 1987                                  7.50         2007       2,250,000           2,304,562
Rush City Independent School District #139                                                                                          
  Unlimited Tax School Building                                                                                                     
  Refunding Bonds School Credit Enhancement Program                            5.25         2018       2,595,000           2,543,022
St. Cloud Hospital Facility                                                                                                         
  Refunding Revenue Bonds Series 1996B (AMBAC Insured)                         5.00         2020       3,000,000           2,792,280
St. Cloud Hospital Facility                                                                                                         
  Refunding Revenue Bonds Series B (AMBAC Insured)                             5.00         2012       2,900,000           2,770,457
St. Cloud Hospital Facility Revenue Bonds                                                                                           
  St. Cloud Hospital Series 1990B                                                                                                   
  (AMBAC Insured)                                                              7.00         2020       5,000,000 (h)       5,590,300
St. Cloud Hospital Facility Refunding Revenue Bonds                                                                                 
  Series C (AMBAC Insured)                                                     5.30         2020       1,515,000           1,432,766
St. Louis Park Health Care Facilities Revenue Bonds                                                                                 
  Healthsystem Minnesota Obligated Group                                                                                            
  Series 1993 (AMBAC Insured)                                                  5.20         2023       5,000,000           4,666,750
St. Louis Park Health Care Facilities Revenue Bonds                                                                                 
  Healthsystem Minnesota Obligated Group Series 1993B                                                                               
  Inverse Floater (AMBAC Insured)                                              6.175        2013       7,000,000 (f)       6,247,500
St. Louis Park Health Care Facilities                                                                                               
  Pre-Refunded Revenue Bonds                                                                                                        
  Park Nicollet Medical Center Series 1990A                                    9.25         2020       4,000,000           4,614,440
St. Louis Park Health Care Facilities                                                                                               
  Pre-Refunded Revenue Bonds                                                                                                        
  Park Nicollet Medical Center Series 1991A                                    8.625        2021       2,000,000           2,298,700
St. Louis Park Multi-family Housing                                                                                                 
  Revenue Refunding Bonds                                                                                                           
  Park Blvd Towers Series 1996A                                                7.00         2031       3,985,000           4,027,679
St. Louis Park Multi-family Rental Housing                                                                                          
  Revenue Bonds Mortgage Loan                                                                                                       
  Community Housing & Services                                                                                                      
  Series 1985 (FHA Insured)                                                    7.375        2028       2,250,000           2,329,672
St. Paul & Minneapolis Housing &                                                                                                    
  Redevelopment Authority Health Care                                                                                               
  Facility Revenue Bonds Group Health Plan Series 1992                         6.75         2013      10,500,000 (h)      11,395,755
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       4,000,000           3,902,360
St. Paul Housing & Redevelopment Authority                                                                                          
  Commercial Development                                                                                                            
  Refunding Revenue Bonds Beverly Enterprises                                                                                       
  Series 1992                                                                  7.75         2002       2,355,000           2,412,745
St. Paul Housing & Redevelopment Authority                                                                                          
  Health Care Facility Revenue Bonds                                                                                                
  Lyngblomsten Care Center Series 1993A                                        7.125        2017       1,880,000           1,931,869
St. Paul Housing & Redevelopment Authority                                                                                          
  Health Care Facility Revenue Bonds                                                                                                
  Lyngblomsten Care Center Series 1993A                                        9.60         2006         950,000             967,936
St. Paul Housing & Redevelopment Authority                                                                                          
  Health Care Facility                                                                                                              
  Multi-family Rental Housing Revenue Bonds                                                                                         
  Lynblomsten 1993B                                                            7.00         2024       1,890,000           1,866,942
St. Paul Housing & Redevelopment Authority                                                                                          
  Sales Tax Revenue Bonds                                                                                                           
  Civic Center (Secondary MBIA Insured)                                        5.55         2023       7,500,000           7,400,475
St. Paul Housing & Redevelopment Authority                                                                                          
  Single Family Mortgage                                                                                                            
  Refunding Revenue Bonds Middle Income Phase II                                                                                    
  FNMA Mortgage Backed                                                         6.80         2028       3,460,000           3,689,467
St. Paul Port Authority Unlimited Tax                                                                                               
  General Obligation Bonds                                                     5.125        2024       2,770,000           2,590,892
Shoreview Senior Housing Revenue Bonds                                                                                              
  Series 1996                                                                  7.25         2026       2,700,000           2,667,519
Southern Minnesota Municipal Power Agency                                                                                           
  Power Supply System                                                                                                               
  Revenue Bonds Zero Coupon                                                                                                         
  Series 1994A (MBIA Insured)                                                  6.67         2019      19,500,000 (g)       5,626,725
Southern Minnesota Municipal Power Agency                                                                                           
  Power Supply System                                                                                                               
  Revenue Bonds Zero Coupon                                                                                                         
  Series 1994A (MBIA Insured)                                                  6.88         2022      12,000,000 (g)       2,915,760
Southern Minnesota Municipal Power Agency                                                                                           
  Pre-Refunded Bonds Series 1988A                                              8.125        2018       1,315,000           1,397,056
Southern Minnesota Municipal Power Agency                                                                                           
  Pre-Refunded Bonds Series 1988B                                              8.125        2018       1,000,000           1,062,400
Southern Minnesota Municipal Power Agency                                                                                           
  Pre-Refunded Revenue Bonds                                                                                                        
  Escrowed to Maturity Series A (Secondary MBIA Insured)                       5.75         2018       1,970,000           1,967,143
Southern Minnesota Municipal Power Agency                                                                                           
  Revenue Bonds (Secondary MBIA Insured)                                       4.75         2016       6,415,000           5,740,783
Southern Minnesota Municipal Power Agency                                                                                           
  Un-Refunded Balance Power Revenue Bonds Series A                             5.75         2018       1,895,000           1,861,023
Spring Park Health Care Facility                                                                                                    
  Revenue Bonds Twin Birch Health Care Center                                                                                       
  Series 1991                                                                  8.25         2011       1,780,000           1,904,547
State General Obligation Various Purpose                                                                                            
  Pre-Refunded Bonds Series 1990                                               7.00         2009       7,850,000           8,543,862
State General Obligation Various Purpose                                                                                            
  Pre-Refunded Bonds Series 1991                                               6.70         2011       8,000,000           8,742,640
State Higher Education Facilities Authority                                                                                         
  Augsburg College Mortgage Revenue Bonds                                                                                           
  Series 4-F1                                                                  6.25         2023       1,750,000           1,786,873
State Higher Education Facility Authority                                                                                           
  Mortgage Pre-Refunded Revenue Bonds                                                                                               
  St. Mary's College Series 2-M                                                8.375        2017       1,000,000           1,090,430
State Housing Facility Authority                                                                                                    
  Housing Finance Agency Housing Development                                                                                        
  Single Family Mortgage Bonds Series B                                        7.25         2016         325,000             332,319
State Housing Finance Agency                                                                                                        
  Single Family Mortgage Bonds                                                                                                      
  Series 1989A A.M.T.                                                          8.00         2029       1,210,000           1,257,444
State Housing Finance Agency                                                                                                        
  Single Family Mortgage Bonds                                                                                                      
  Series 1990A A.M.T.                                                          7.95         2022       3,210,000           3,391,526
State Housing Finance Agency                                                                                                        
  Single Family Mortgage Bonds                                                                                                      
  Series 1991A A.M.T.                                                          7.45         2022       3,575,000           3,748,745
State Housing Finance Agency                                                                                                        
  Single Family Mortgage Bonds Series 1992A                                    6.95         2016       2,930,000           3,088,923
State Housing Finance Agency                                                                                                        
  Single Family Mortgage Revenue Bonds                                                                                              
  Series L A.M.T.                                                              6.70         2020       1,060,000           1,096,877
State Public Facilities Authority                                                                                                   
  Water Pollution Control Revenue Bonds                                                                                             
  Series 1989A                                                                 7.00         2009       6,250,000           6,739,625
State University Board of Regents                                                                                                   
  General Obligation Inverse Floater Bonds                                                                                          
  Series 1993A Bonds                                                           5.82         2003       5,000,000 (f)       4,981,250
State University Board of Regents                                                                                                   
  General Obligation Pre-Refunded Bonds                                                                                             
  Series 1989A                                                                 6.00         2011       4,625,000           4,924,237
State University Board of Regents                                                                                                   
  General Obligation Bonds Series 1996A                                        5.50         2021       8,000,000           7,862,640
State University Board State University System                                                                                      
  Pre-Refunded Revenue Bonds                                                                                                        
  Series 1989A (MBIA Insured)                                                  7.40         2019       2,250,000           2,421,968
Vadnais Heights Multi-family Housing                                                                                                
  Cottages of Vadnais Heights                                                                                                       
  Refunding Revenue Bonds                                                                                                           
  Series 1995 A.M.T.                                                           7.00         2031       3,200,000           3,179,072
Washington County General Obligation                                                                                                
  Capital Improvement Bonds                                                                                                         
  Series 1989A                                                                 7.00        2009-10     4,425,000           4,663,153
Washington County Housing & Redevelopment Authority                                                                                 
  Multi-family Housing Revenue Bonds                                                                                                
  Orleans Homes Series 1987-2 A.M.T.                                           9.00         2017       2,000,000           2,039,560
Washington County Housing & Redevelopment Authority                                                                                 
   Woodbury Multi-family Housing                                                                                                    
   Refunding Revenue Bonds Series 1996                                         6.95         2023       2,000,000           1,999,840
Western Minnesota Municipal Power Agency                                                                                            
  Revenue Bonds                                                                                                                     
  Escrowed to Maturity (AMBAC Insured)                                         6.75         2016       5,935,000           6,465,767
Western Minnesota Municipal Power Agency                                                                                            
  Supply Refunding Revenue Bonds                                                                                                    
  Series 1987A                                                                 5.50         2015       6,250,000           6,200,687
Western Minnesota Municipal Power Agency                                                                                            
  Supply Refunding Revenue Bonds                                                                                                    
  Series 1987A                                                                 6.875        2007       2,500,000           2,550,000
Western Minnesota Municipal Power Agency                                                                                            
  Supply Refunding Revenue Bonds                                                                                                    
  Series 1987A                                                                 7.00         2013       7,300,000           7,446,000
Western Minnesota Municipal Power Agency                                                                                            
  Supply Refunding Revenue Bonds                                                                                                    
  Series A (Secondary MBIA Insured)                                            5.50         2015       5,000,000           4,893,850
White Bear Lake Independent School District #624                                                                                    
   Unlimited Tax General Obligation School Building Bonds                                                                           
   Series 1996A                                                                5.75         2017       2,140,000           2,165,530
White Bear Lake Industrial Development                                                                                              
  Revenue Bonds                                                                                                                     
  Taylor Series 1988A A.M.T.                                                   8.75         2008       2,250,000           2,422,012

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Total investment in securities                                                                                                      
(Cost: $381,356,749) (i)                                                                                                $405,409,640
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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                              12-31-96                        06-30-96
    ----------------------------------------------------------------------------
    AAA                                      45%                             48%
   AA                                       19                              18
   A                                        15                              15
   BBB                                       8                               7
   BB and below                             12                              10
   Non-rated                                 1                               2
    ----------------------------------------------------------------------------
    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         
CGIC         -- Capital Guaranty Insurance Company                      
FGIC         -- Financial Guarantee Insurance Corporation               
FHA          -- Federal Housing Authority                               
FSA          -- 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 Dec. 31, 1996, the value of
                 securities subject to alternative minimum tax represented
15.2% of net assets                     
(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 Dec. 31, 1996. Inverse floaters in the aggregate
represent 4.3% of the Fund's net assets as of Dec. 31, 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 March 1997                                 $5,100,000
    ----------------------------------------------------------------------------

(i) At Dec. 31, 1996, the cost of securities for federal income tax purposes was
 approximately $380,447,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:                   

   Unrealized appreciation                                         $25,535,000
    Unrealized depreciation                                            (572,000)
    ----------------------------------------------------------------------------
   Net unrealized appreciation                                     $24,963,000
    ----------------------------------------------------------------------------

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Investments in securities                                                                                                           

IDS New York Tax-Exempt Fund                                                                         (Percentages represent value of
Dec. 31, 1996 (Unaudited)                                                                        investments compared to net assets)
------------------------------------------------------------------------------------------------------------------------------------

Municipal bonds (97.6%)                                                                                                             
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Name of issuer                                                                  Coupon  Maturity       Principal            Value(a)
and title of issue (b,c,d)                                                        rate      year          amount                    
------------------------------------------------------------------------------------------------------------------------------------
Battery Park City Authority                                                                                                         
                                                                                                                                    
  Senior Refunding Revenue Bonds Series 1993A                                     5.25 %    2017      $4,000,000          $3,712,800
Broome County Certificates of Partication                                                                                           
  Public Safety Facility Series 1994 (MBIA Insured)                               5.25      2022       2,650,000           2,494,524
Buffalo Municipal Water Agency Authority Water System                                                                               
  Revenue Bonds Series 1995 (FGIC Insured)                                        5.00      2025       1,000,000             912,410
Erie County Unlimited Tax General Obligation Bonds                                                                                  
   Series B (FGIC Insured)                                                        5.50      2025         700,000             687,148
Erie County Water Authority Fourth Resolution Water                                                                                 
  Refunding Revenue Bonds Zero Coupon                                                                                               
  Series 1992 (AMBAC Insured)                                                     7.30      2017       1,215,000 (e)         271,929
Erie County Water Authority Water Works System                                                                                      
  Revenue Bonds Escrowed to Maturity                                                                                                
  Series 1990A (AMBAC Insured)                                                    6.00      2008       1,765,000           1,878,507
Fallsburg Sullivan County Unlimited Tax General                                                                                     
  Obligation Improvement Pre-Refunded Bonds                                                                                         
  Series 1991                                                                     7.05     2011-14     1,300,000           1,455,324
Great Neck North Water Authority Water System                                                                                       
  Pre-Refunded Revenue Bonds Series 1989A                                         6.00      2020       1,415,000           1,482,439
Metropolitan Transportation Authority Commuter Facilities                                                                           
  1987 Service Contract Refunding Bonds Series 5                                  6.50      2016       1,775,000           1,844,402
Monroe County Utility General Obligation                                                                                            
  Pre-Refunded Bonds Water Improvement System                                     7.10     2008-09     1,000,000           1,076,220
Municipal Assistance New York City Series 59                                      7.75      2006         660,000             685,172
Municipal Assistance New York City Series 62                                      6.75      2006       2,200,000           2,270,466
Municipal Assistance Troy New York                                                                                                  
  General Revenue Bonds Series 1996A (MBIA Insured)                               5.00      2022       1,250,000           1,155,962
New York & New Jersey Port Authority Special Obligation                                                                             
  Revenue Bonds KIAC Partners Project Series 4 A.M.T.                             6.75      2019       1,500,000           1,534,245
New York City General Obligation Bonds Series 1995B                               7.00      2016       1,500,000           1,614,390
New York City General Obligation Bonds Series J                                   5.875     2019       1,000,000             969,260
New York City Municipal Water Finance Authority                                                                                     
  Water & Sewer System Revenue Bonds                                                                                                
   Series B Inverse Floater (MBIA Insured)                                        6.57      2009       2,000,000 (f)       1,922,500
New York City Municipal Water Finance Authority                                                                                     
  Water & Sewer System Revenue Bonds                                                                                                
  Series B (MBIA Insured)                                                         5.75      2026         500,000             503,105
New York City Unlimited Tax General Obligation Bonds                                                                                
  Series 1996G                                                                    5.75      2017       1,500,000           1,437,915
New York City Water Finance Authority                                                                                               
  Water & Sewer System Pre-Refunded Revenue Bonds                                                                                   
  Series A (FGIC Insured)                                                         6.75      2014       1,185,000           1,273,567
New York City Water Finance Authority                                                                                               
  Water & Sewer System Revenue Bonds                                                                                                
  Series A (FGIC Insured)                                                         6.75      2014         565,000             607,228
New York City Water Finance Authority                                                                                               
  Water & Sewer System Revenue Pre-Refunded Bonds                                                                                   
  Series 1988A                                                                    7.00      2018       1,000,000           1,030,550
State Dormitory Authority City University System                                                                                    
  Consolidated 3rd Resolution Revenue Bonds                                                                                         
  Series 1994-2 (MBIA Insured)                                                    6.25      2019       1,500,000           1,580,610
State Dormitory Authority City University System                                                                                    
  Pre-Refunded Revenue Bonds                                                      8.125     2017       3,400,000 (h)       3,545,112
State Dormitory Authority City University System                                                                                    
  Revenue Bonds Series 1993A                                                      5.75      2013       3,000,000           2,993,670
State Dormitory Authority Revenue Bonds                                                                                             
  The Devereux Foundation Series 1995 (MBIA Insured)                              5.00      2015       1,000,000             939,100
State Dormitory Authority Revenue Bonds                                                                                             
   NYACK Hospital Series 1996                                                     6.25      2013       1,000,000           1,018,060
State Dormitory Authority State University Education Facility                                                                       
  Cooper Union Insured College Revenue Bonds                                                                                        
  Series 1996 (AMBAC Insured)                                                     5.375     2020         860,000             832,704
State Dormitory Authority State University Education Facility                                                                       
  Pre-Refunded Revenue Bonds Series 1990A                                         7.70      2012       1,750,000           1,967,472
State Dormitory Authority State University Education Facility                                                                       
  Refunding Revenue Bonds Series 1990B                                            7.50      2011       1,900,000           2,228,187
State Dormitory Authority State University Education Facility                                                                       
  Revenue Bonds (Secondary AMBAC Insured)                                         5.25      2015       1,000,000             980,310
State Dormitory Authority State University Education Facility                                                                       
  Revenue Bonds (Secondary AMBAC Insured)                                         5.50      2019       2,000,000           2,012,700
State Energy Research & Development Authority                                                                                       
  Electric Facility Revenue Bonds                                                                                                   
  Consolidated Edison Series 1986A A.M.T.                                         7.50      2021       1,750,000           1,788,693
State Energy Research & Development Authority                                                                                       
  Electric Facility Revenue Bonds                                                                                                   
  Consolidated Edison Series 1989A A.M.T.                                         7.75      2024       1,000,000           1,043,780
State Energy Research & Development Authority                                                                                       
  Electric Facility Revenue Bonds Consolidated Edison                                                                               
   Series 1990A A.M.T.                                                            7.50      2025       5,000,000 (h)       5,343,050
State Energy Research & Development                                                                                                 
  Authority Gas Facility                                                                                                            
  Revenue Bonds Brooklyn Union Gas Series I                                       7.125     2020       2,000,000           2,043,080
State Energy Research & Development Authority Gas Facility                                                                          
  Revenue Bonds Brooklyn Union Gas Series II                                      7.00      2020       1,500,000           1,532,220
State Energy Research & Development                                                                                                 
  Authority Pollution Control Refunding                                                                                             
  Revenue Bonds Rochester Gas & Electric                                                                                            
  (MBIA Insured) A.M.T.                                                           6.50      2032       2,500,000           2,668,950
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           2,918,220
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           3,305,430
State Local Government Assistance Bonds Series C                                  5.50      2022       1,500,000           1,438,665
State Local Government Assistance Pre-Refunded Bonds                                                                                
  Series 1991A                                                                    7.00      2016       4,000,000           4,470,240
State Medical Care Facility Finance Agency                                                                                          
  Hospital & Nursing Home Mortgage Revenue Bonds                                                                                    
  Montefiore Hospital                                                                                                               
  Series 1989A (FHA Insured)                                                      7.25      2024       1,400,000           1,514,030
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             970,010
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           1,408,005
State Medical Care Facility Finance Agency Pre-Refunded Bonds                                                                       
  Presbyterian Hospital Series 1985B                                              8.00      2025       1,320,000           1,382,172
State Medical Care Facility Finance Agency Revenue Bonds                                                                            
  Buffalo General Hospital Series 1988C (FHA Insured)                             7.60      2008       1,500,000           1,615,245
State Medical Care Facility Finance Agency Revenue Bonds                                                                            
  Buffalo General Hospital Series 1988C (FHA Insured)                             7.70      2022       1,950,000           2,102,861
State Medical Care Facility Finance Agency Secured Hospital                                                                         
  Revenue Bonds Series 1987A                                                      7.10      2027         550,000             561,858
State Mortgage Agency Homeowner Mortgage Revenue Bonds                                                                              
  Series TT                                                                       7.50      2015       4,000,000           4,266,760
State Mortgage Agency Homeowner Mortgage Revenue Bonds                                                                              
  Series 27                                                                       6.90      2015       3,000,000           3,181,770
State Mortgage Agency Revenue Bonds                                                                                                 
  Series 9 A.M.T.                                                                 7.30      2017         970,000             990,719
State Thruway Authority Local Highway & Bridge Service                                                                              
  Contract Bonds Series 1991                                                      6.00      2011       2,500,000           2,507,025
State Urban Development Correction Facility                                                                                         
  Pre-Refunded Revenue Bonds Series 1 (FSA Insured)                               7.50      2020       4,500,000           4,991,265
State Urban Development Correctional Capital Facilities                                                                             
  Refunding Revenue Bonds Series 1993A                                            5.25      2021       2,500,000           2,242,675
State Urban Development Correctional Capital Facilities                                                                             
  Revenue Bonds Series 5 (MBIA Insured)                                           5.50      2025         750,000             736,343
State Urban Development Revenue Bonds                                                                                               
  Higher Education Applied Technology Grants                                                                                        
  Series 1995 (MBIA Insured)                                                      5.75      2015       1,000,000           1,011,480
Triborough Bridge & Tunnel Authority                                                                                                
  General Purpose Pre-Refunded Revenue Bonds Series S                             7.00      2021       3,000,000           3,324,540
Triborough Bridge & Tunnel Authority                                                                                                
  Special Obligation Refunding Bonds                                                                                                
  Series 1991B (FGIC Insured)                                                     6.875     2015       2,000,000           2,187,860
United Nations Development Senior Lien                                                                                              
  Refunding Revenue Bonds Series 1992A                                            6.00      2026       4,500,000           4,535,730
Utica Industrial Development Agency                                                                                                 
   Civic Facility Revenue Bonds                                                                                                     
   Series 1996A (MBIA Insured)                                                    5.50      2016         750,000             732,443
------------------------------------------------------------------------------------------------------------------------------------
Total municipal bonds                                                                                                               
(Cost: $107,657,131)                                                                                                    $115,733,107
____________________________________________________________________________________________________________________________________


Short-term securities                                                           
(0.6%)                                                                          
--------------------------------------------------------------------------------
Issuer (d,g)                             Effective        Amount      Value (a) 
                             yield    payable at
                                        maturity
--------------------------------------------------------------------------------
Municipal notes                                                                 
New York City Municipal Water Authority                                         
Water & Sewer System Revenue Bonds                                          
  06-15-22                                   5.00%       200,000    $    200,000
New York City Municipal Water Authority                                         
Water & Sewer System Revenue Bonds Series A                                 
  06-15-25                                   4.70        500,000         500,000
--------------------------------------------------------------------------------
Total short-term securities                                                     
(Cost: $700,000)                                                    $    700,000
--------------------------------------------------------------------------------
Total investments in securities                                                 
(Cost: $108,357,131)(i)                                             $116,433,107
--------------------------------------------------------------------------------

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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                               12-31-96                       06-30-96
    ----------------------------------------------------------------------------
    AAA                                        51%                           52%
   AA                                         17                            18
   A                                          16                            15
   BBB                                        15                            14
   BB and below                                1                             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 Dec. 31, 1996, the value of
             securities subject to alternative minimum tax represented
13.7% 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 Dec. 31, 1996. Inverse floaters in the aggregate  
represent 1.6% of the Fund's net assets as of Dec. 31, 1996.            
(g) The Fund is entitled to receive principal amount from issuer or corporate   
   guarantor, if indicated in parenthesis, after a day or a week's notice. The
   maturity date disclosed represents the final maturity. Interest rate varies
 to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 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  March 1997                               $6,300,000
  --------------------------------------------------------------------------

(i) At Dec. 31, 1996, the cost of securities for federal income tax purposes was
    approximately $108,291,000 and the approximate gross unrealized appreciation
and depreciation based on that cost was:                                

   Unrealized appreciation                                          $8,425,000
    Unrealized depreciation                                            (283,000)
   ___________________________________________________________________________
   Net unrealized appreciation                                      $8,142,000
   ---------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]

Investments in securities                                                                                                           

IDS Ohio Tax-Exempt Fund                                                                                                            
Dec. 31, 1996 (Unaudited)                                                                       (Percentages represent value of     
                                                                                                 investments compared to net assets)
------------------------------------------------------------------------------------------------------------------------------------

Municipal bonds (98.3%)                                                                                                             
------------------------------------------------------------------------------------------------------------------------------------

Name of issuer and                                                              Coupon   Maturity      Principal           Value(a) 
title of issue (b,c,d)                                                            rate       year         amount                    
------------------------------------------------------------------------------------------------------------------------------------
Barberton Limited Tax Various Purpose General Obligation Bonds                                                                      
                                                                                                                                    
  Series 1989-1                                                                   7.35%     2009     $   700,000         $   762,195
Bellefontaine Hospital Facility                                                                                                     
  Refunding Revenue Bonds                                                                                                           
  Mary Rutan Health Association of Logan County                                                                                     
  Series 1993                                                                     6.00      2013       1,000,000             970,710
Buckeye Valley Local School District School                                                                                         
  Improvement Unlimited Tax                                                                                                         
  General Obligation Bonds Series 1995A (MBIA Insured)                            5.25      2020       1,000,000             957,940
Butler County Hospital Facility Improvement                                                                                         
  Refunding Revenue Bonds                                                         7.50      2010       1,750,000           1,874,442
Carroll Water & Sewer District                                                                                                      
  Water System Improvement Unlimited Tax                                                                                            
  General Obligation Bonds                                                        6.25      2010         955,000             913,935
Clermont County Hospital Facility Revenue Bonds                                                                                     
  Mercy Health System Province of Cincinnati                                                                                        
  Series 1989A (AMBAC Insured)                                                    7.50      2019         750,000             830,396
Cleveland Airport Systems Revenue Bonds                                                                                             
  Series 1990A (MBIA Insured) A.M.T.                                              7.40      2020         500,000             545,920
Cleveland General Obligation Pre-Refunded Bonds                                   7.375     2003         125,000             130,785
Cleveland Public Power System 1st Mortgage                                                                                          
  Pre-Refunded Revenue Bonds                                                      8.375     2017         100,000             104,735
Cleveland Waterworks Improvement 1st Mortgage                                                                                       
  Refunding Revenue Bonds                                                                                                           
  Series F 1992B (AMBAC Insured)                                                  6.25      2016       1,000,000 (f)       1,058,550
Cleveland Waterworks Improvement 1st Mortgage                                                                                       
  Revenue Bonds Series 1987E                                                      6.00      2017         200,000             199,978
Cleveland Waterworks Improvement 1st Mortgage                                                                                       
  Pre-Refunded Revenue Bonds Series 1987E                                         7.875     2016         650,000             663,000
Coshocton County Solid Waste Disposal                                                                                               
  Refunding Revenue Bonds                                                                                                           
  Stone Container Series 1992                                                     7.875     2013       1,000,000           1,071,900
Cuyahoga County Health Care Facilities                                                                                              
  Refunding Revenue Bonds                                                                                                           
  Judson Retirement Community Series 1996A                                        7.25      2018       1,000,000           1,005,880
Cuyahoga County Hospital Improvement Revenue Bonds                                                                                  
  Cleveland Clinic Foundation                                                     7.00      2013         500,000             508,330
Cuyahoga County Hospital Improvement                                                                                                
  Pre-Refunded Revenue Bonds                                                                                                        
  Cleveland Clinic Foundation Series 1987A                                        7.875     2010         275,000             290,845
Cuyahoga County Hospital Improvement Revenue Bonds                                                                                  
  Mount Sinai Medical Center Series 1991 (AMBAC Insured)                          6.625     2021         600,000             666,660
Cuyahoga County Hospital Improvement Revenue Bonds                                                                                  
  University Hospitals Health System                                                                                                
  Series 1992 (AMBAC Insured)                                                     6.50      2011         500,000             540,360
Cuyahoga County Hospital Refunding Revenue Bonds                                                                                    
  Cleveland Clinic Foundation Series 1992                                         5.50      2011       1,500,000           1,514,205
Cuyahoga County Hospital Refunding Revenue Bonds                                                                                    
  Mount Sinai Medical Center Series 1987A                                         8.125     2014         400,000             423,196
Cuyahoga County Hospital Revenue Bonds                                                                                              
  Meridia Health Series 1991                                                      7.00      2023       1,000,000           1,079,800

See accompanying notes to investments in securities.                                                                                

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Cuyahoga County Limited Tax General Obligation Bonds                              5.60      2013         500,000             513,375
Cuyahoga Hospital Revenue Bonds Metrohealth System                                                                                  
  Series 1989 (MBIA Insured)                                                      6.00      2019       1,000,000           1,012,380
Delaware County Sewer Improvement Limited Tax                                                                                       
  General Obligation Bonds                                                        5.25      2015       1,000,000             970,780
Dover Limited Tax Improvement General Obligation Bonds                                                                              
  Municipal Sewer System                                                          7.10      2009       1,000,000           1,082,690
Elyria Limited Tax Improvement General Obligation                                                                                   
  Recreation Facility Bonds                                                       7.10      2009         715,000             774,123
Erie County Hospital Improvement Refunding Revenue Bonds                                                                            
  Firelands Community Hospital Series 1992                                        6.75      2015       2,000,000 (f)       2,113,920
Franklin County Convention Facilities Authority                                                                                     
  Tax & Lease Revenue Anticipation                                                                                                  
  Pre-Refunded Bonds (MBIA Insured)                                               7.00      2019       1,500,000           1,671,615
Highland Heights Limited Tax Improvement                                                                                            
  General Obligation Street Bonds                                                 7.75      2008         400,000             431,016
Hilliard County School District Unlimited Tax                                                                                       
  General Obligation Bonds Series A (FGIC Insured)                                5.00      2020       1,000,000             931,360
Kettering School District Improvement                                                                                               
  General Obligation Bonds (FGIC Insured)                                         5.25      2022       1,000,000             956,330
Lake County Water System Limited Tax Improvement                                                                                    
  General Obligation Pre-Refunded Bonds Series 1987-2                             8.125     2010         700,000             741,650
Lakota Local School District Butler County School                                                                                   
  Unlimited Tax Improvement Bonds                                                 7.00      2012         500,000             539,170
Lakota Local School District Butler County School                                                                                   
  Unlimited Tax Improvement Pre-Refunded Bonds                                    7.90      2011         200,000             214,550
Lakota Local School District Unlimited Tax Improvement                                                                              
  General Obligation Bonds (AMBAC Insured)                                        6.25      2014       2,000,000           2,134,980
Lima Limited Tax Improvement General Obligation                                                                                     
  Sanitary Sewer System Pre-Refunded Bonds                                        8.25      2012         200,000             212,176
Lorain County Hospital Facilities Refunding Revenue Bonds                                                                           
  Elyria United Methodist Series C                                                6.875     2022       1,000,000           1,005,100
Lorain County Hospital Facilities Refunding Revenue Bonds                                                                           
  EMH Regional Medical Center Series 1995 (AMBAC Insured)                         5.375     2021       2,000,000           1,939,860
Lucas County Hospital Refunding Revenue Bonds                                                                                       
  St. Vincent's Medical Center Series B (MBIA Insured)                            5.25      2020       1,000,000             941,910
Marietta Sewer System Improvement Bonds (BIG Insured)                             7.50      2007         200,000             209,570
Marion County Health Care Facilities Improvement                                                                                    
  Refunding Revenue Bonds United Church Homes                                                                                       
  Series 1993                                                                     6.375     2010       1,000,000           1,016,280
Marysville Sewer System 1st Mortgage Revenue Bonds                                                                                  
  Series 1988 (BIG Insured) A.M.T.                                                7.85      2008         400,000             425,884
Marysville Water System Mortgage Revenue Bonds                                                                                      
  Series 1991 (MBIA Insured)                                                      7.05      2021       1,000,000           1,124,040
Medina County Hospital Revenue Bonds Medina County                                                                                  
  Community Hospital Series 1987 (AMBAC Insured)                                  6.875     2016         100,000             104,292
Miami County Hospital Facility Refunding Revenue Bonds                                                                              
  Upper Valley Medical Center Series 1987A                                        8.375     2013          75,000 (f)          77,452
Montgomery County Health Facilities Revenue Bonds                                                                                   
  Friendship Village Dayton Series 1990A                                          9.25      2016       1,000,000           1,051,100
Montgomery County Hospital Facility                                                                                                 
  Refunding Revenue & Improvement Bonds                                                                                             
  Ketter Medical Center                                                                                                             
  Series 1996 (MBIA Insured)                                                      5.50      2026       1,000,000             974,370
Montgomery County Water Revenue Bonds                                                                                               
  Greater Moraine - Beavercreek District (FGIC Insured)                           6.25      2017       1,000,000           1,064,390
North Olmsted County Limited General Obligation Bonds                                                                               
  Series 1996 (AMBAC Insured)                                                     5.00     2016-21     1,700,000           1,598,792
Parma Hospital Improvement Revenue Bonds                                                                                            

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  Parma Community General Hospital                                                                                                  
  Series 1989B (MBIA Insured)                                                     7.125     2013         500,000             533,975
Pickerington Local School District Unlimited Tax                                                                                    
  General Obligation Pre-Refunded Bonds (AMBAC Insured)                           7.00      2013       1,000,000           1,114,410
Rural Loraine County Water Authority Water                                                                                          
  Resource Improvement Pre-Refunded Revenue Bonds                                                                                   
  Series 1991 (AMBAC Insured)                                                     7.00      2011       1,000,000           1,116,580
Southwest Licking Local School District School Facilities                                                                           
  Unlimited Tax General Obligation Bonds (FGIC Insured)                           5.75      2022         500,000             505,180
Southwest Local School District                                                                                                     
  Hamilton & Butler Counties School                                                                                                 
  Unlimited Tax Improvement Bonds (AMBAC Insured)                                 7.65      2010         500,000             560,300
State Air Quality Development Authority                                                                                             
  Refunding Revenue Bonds                                                                                                           
  JMG Funding Limited Partnership                                                                                                   
  (AMBAC Insured) A.M.T.                                                          6.375     2029         500,000             532,625
State Air Quality Development Authority Refunding Revenue Bonds                                                                     
  Series 1994 (AMBAC Insured) A.M.T.                                              6.375     2029       2,000,000           2,130,500
State Air Quality Development Authority Revenue Bonds                                                                               
  Cleveland Electric Illuminating Series A                                        7.00      2009         340,000             340,085
State Air Quality Development Authority Revenue Bonds                                                                               
  Columbus & Southern Series A (FGIC Insured)                                     6.375     2020       1,000,000           1,071,250
State Building Authority Local Jail Grant Bonds                                                                                     
  Series 1989A (MBIA Insured)                                                     7.35      2009         500,000             555,185
State Building Authority State Correctional Facility                                                                                
  Revenue Bonds Series B                                                          7.125     2009          75,000              76,601
State Building Authority State Facility Pre-Refunded Bonds                                                                          
  Columbus State Office Building Series 1985C                                     7.35      2005       1,000,000           1,109,620
State Higher Educational Facility Pre-Refunded Revenue Bonds                                                                        
  Oberlin College Series 1989                                                     7.375     2014         500,000             549,425
State Housing Finance Agency Mortgage Revenue Bonds                                                                                 
  Aristocrat South Board & Care                                                                                                     
  Series 1991A (FHA Insured) A.M.T.                                               7.30      2031       1,500,000           1,569,915
State Housing Finance Agency Single Family Mortgage                                                                                 
  Revenue Bonds Series 1990A (GNMA Insured) A.M.T.                                7.80      2030         495,000             520,299
State Housing Finance Agency Single Family Mortgage                                                                                 
  Revenue Bonds Series 1990C (GNMA Insured) A.M.T.                                7.85      2021         800,000             847,552
State Municipal Electric Generation Agency Joint Venture #5                                                                         
  Revenue Bonds (AMBAC Insured)                                                   5.375     2024       2,000,000           1,918,640
State Turnpike Revenue Bonds Series A                                             5.75      2024       1,000,000             997,200
State Turnpike Revenue Bonds Series A (MBIA Insured)                              5.50      2026       1,000,000             982,830
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           1,914,220
State Water & Air Quality Development Authority                                                                                     
  Cleveland Electric Illumination                                                                                                   
  Pollution Control Refunding Revenue Bonds                                                                                         
  Series 1995                                                                     7.70      2025       1,000,000           1,082,920
State Water Development Authority Bonds Toledo Edison                                                                               
  Series 1994 A.M.T.                                                              8.00      2023       1,000,000           1,090,770
State Water Development Authority Pollution Control                                                                                 
  Revenue Bonds Phillip Morris                                                    7.25      2008         150,000             157,390
State Water Development Authority Water Development                                                                                 
  Pre-Refunded Bonds Pure Water Series 1987I                                      7.75     2006-14       200,000             207,414
State Water Development Authority Water Development                                                                                 
  Pre-Refunded Bonds Pure Water Series 1988I                                      7.00      2014         500,000             521,935
State Water Development Authority Water Development                                                                                 
  Refunding Revenue Bonds Pure Water (AMBAC Insured)                              5.50      2018         750,000             734,078
State Water Development Solid Waste Disposal                                                                                        

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  Northstar BHP Steel LLC-Cargill Series 1995                                                                                       
  Revenue Bonds A.M.T.                                                            6.30      2020         500,000 (f)         523,480
Summit County Industrial Development Revenue Bonds                                                                                  
  Century Products                                                                7.75      2005         100,000             103,702
Summit County Limited Tax General Obligation                                                                                        
  Pre-Refunded Bonds                                                                                                                
  Human Services Facility (AMBAC Insured)                                         8.00      2007          95,000             100,576
Sycamore Board of Education Community School District                                                                               
  Hamilton County School Improvement Bonds                                        6.50      2009         500,000             519,135
University of Cincinnati Certificates of Participation                                                                              
  Student Recreation Center Series 1996 (MBIA Insured)                            5.125     2024       1,000,000             943,130
University General Receipts Refunding Revenue Bonds                                                                                 
  Student Recreation Center (FGIC Insured)                                        5.00      2013       1,000,000             949,570
University of Cincinnati General Receipt                                                                                            
  Pre-Refunded Bonds Series I-1                                                   7.10      2010         750,000             814,650
University of Toledo General Receipt                                                                                                
  Pre-Refunded Bonds Series 1990 (MBIA Insured)                                   7.125     2020         500,000             553,570
Warren County Various Purpose Limited Tax                                                                                           
  General Obligation Bonds Series 1992                                            6.10      2012         500,000             538,700
Whitehall City School District Franklin County Unlimited Tax                                                                        
  Improvement General Obligation Pre-Refunded                                                                                       
  School Building Construction                                                    7.25      2013         500,000             550,435
------------------------------------------------------------------------------------------------------------------------------------
Total municipal bonds                                                                                                               
(Cost: $65,491,862)                                                                                                      $70,284,764
------------------------------------------------------------------------------------------------------------------------------------

Short-term security (0.4%)                                                      
--------------------------------------------------------------------------------
Issuer (d,e)                          Effective        Amount           Value(a)
                       yield    payable at
                                  maturity
--------------------------------------------------------------------------------
Municipal note                                                                  
State Air Quality Development Authority Revenue Bonds                           
Cincinnati Gas & Electric                                                   
Series A.V.R.                                                               
  12-01-15                                4.70%      $300,000        $   300,000
--------------------------------------------------------------------------------
Total short-term security                                                       
(Cost: $300,000)                                                     $   300,000
--------------------------------------------------------------------------------
Total investments in securities                                                 
(Cost: $65,791,862)(g)                                               $70,584,764
--------------------------------------------------------------------------------

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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                                12-31-96                          06-30-96
--------------------------------------------------------------------------------
AAA                                        65%                               68%
AA                                          9                                10 
A                                           9                                 9 
BBB                                         9                                 7 
BB and below                                8                                 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 Dec. 31, 1996, the value of
                 securities subject to alternative minimum tax represented 11.4%
of net assets.                                
V.R.     --  Variable Rate                                              

(e) The Fund is entitled to receive principal amount from issuer or corporate   
  guarantor, if indicated in parenthesis after a day or a week's notice. The
   maturity date disclosed represents the final maturity. Interest rate varies
 to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 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 March 1997                                   $900,000
   ---------------------------------------------------------------------------

(g) At Dec. 31, 1996, the cost of securities for federal income tax purposes was
approximately $65,729,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:                   

   Unrealized appreciation                                          $4,897,000
    Unrealized depreciation                                             (41,000)
    ----------------------------------------------------------------------------
   Net unrealized appreciation                                     $ 4,856,000
    ----------------------------------------------------------------------------

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Board members and officers                                                      

Board members and officers of the Fund                                          
-----------------------------------------------------------------               
President and interested board member                                           

William R. Pearce                                                               
President and director, Board Services Corporation (provides administrative     
services to boards including the boards of the IDS and IDS Life funds and Master
Trust Portfolios).                                                              
-----------------------------------------------------------------               
Independent board members                                                       

H. Brewster Atwater Jr.                                                         
Former chairman and chief executive officer, General Mills, Inc.                

Lynne V. Cheney                                                                 
Distinguished fellow, American Enterprise Institute for                         
Public Policy Research.                                                         

Robert F. Froehlke                                                              
Former president of all funds in the IDS MUTUAL FUND GROUP.                     

Heinz F. Hutter                                                                 
Former president and chief operating officer, Cargill, Inc.                     

Anne P. Jones                                                                   
Attorney and telecommunications consultant.                                     

Melvin R. Laird                                                                 
Senior counsellor for national and international affairs, The Readers's Digest  
Association, Inc.                                                               

Alan K Simpson                                                                  
Former United States senator for Wyoming                                        

Edson W. Spencer                                                                
Former chairman and chief executive officer, Honeywell, Inc.                    

Wheelock Whitney                                                                
Chairman, Whitney Management Company.                                           

C. Angus Wurtele                                                                
Chairman of the board, The Valspar Corporation.                                 
-----------------------------------------------------------------               
Interested board members who are officers and/or employees of AEFC              

William H. Dudley                                                               
Executive vice president, AEFC.                                                 

David R. Hubers                                                                 
President and chief executive officer, AEFC.                                    

John R. Thomas                                                                  
Senior vice president, AEFC.                                                    
-----------------------------------------------------------------               
Officers who also are officers and/or employees of AEFC                         

Peter J. Anderson                                                               
Senior vice president, AEFC. Vice president - Investments for the Fund.         

Melinda S. Urion                                                                
Senior vice president and chief financial officer, AEFC. Treasurer for the Fund.
-------------------------------------------------------------------             
Other officer                                                                   

Leslie L. Ogg                                                                   
Vice president, treasurer and corporate secretary of Board Services Corporation.
Vice president, general counsel and secretary for the Fund.                     

Refer to the SAI for the board members' and officers' biographies.              

IDS mutual funds                                                                

Global/International funds                                                      

Funds in this group seek capital growth and/or income by investing primarily in 
foreign securities. Foreign investments may be subject to currency fluctuations 
and political and economic risks of the countries in which the investments are  
made. They are high risk mutual funds with a potential for high reward.         

IDS Emerging Markets Fund                                                       

Invests in a Portfolio comprised primarily of stocks of companies in developing 
countries throughout the world that are believed to offer growth potential.     
Seeks to provide long-term growth of capital.                                   

(icon of) world globe                                                           

IDS Global Growth Fund                                                          
Invests in a Portfolio comprised primarily of 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 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 Global Balanced Fund                                                        

Invests in stocks-and bonds in, for the most part, major markets throughout the 
world, including the U.S. Seeks to provide a balance of growth of capital and   
current income.                                                                 

(icon of) scale of globes                                                       

IDS Global Bond Fund                                                            

Invests in a Portfolio comprised primarily of debt securities of U.S. and       
foreign issuers to seek high total return through income and growth of capital. 

(icon of) globe                                                                 

Growth funds                                                                    

Funds in this group seek capital growth, primarily from common stocks. They are 
high risk mutual funds with a potential for high reward.                        

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. A   
highly aggressive and speculative fund that seeks long-term growth of capital.  

(icon of) cart of precious gems                                               

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) building                                                              

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 in a Portfolio comprised primarily of 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 in a Portfolio comprised primarily of companies that have above-average 
potential for long-term growth as a result of new management, marketing         
opportunities or technological superiority.                                     

(icon of) flower                                                                

IDS New Dimensions Fund                                                         

Invests in a Portfolio  comprised primarily of companies with significant growth
potential due to superiority in  technology,  marketing or management.  The Fund
frequently changes its industry mix.                                            

(icon of) dimension                                                             

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                                                         

Growth and income funds                                                         

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.                                                                       

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 Managed Allocation Fund                                                     

Invests in a Portfolio comprised primarily of 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) spinning toy                                                          

IDS Stock Fund                                                                  

Invests in a Portfolio comprised primarily of common stocks 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                                                 

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 in a Portfolio comprised 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 Portfolio which seeks to 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                                                      

Income funds                                                                    

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 Extra Income Fund                                                           

Invests in a Portfolio comprised 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) two 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                                                          

IDS Selective Fund                                                              

Invests in a Portfolio comprised primarily of 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 in a Portfolio comprised primarily of 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                                                

Tax-exempt income funds                                                         

These funds provide tax-free income by investing in municipal bonds. The income 
is generally free from federal income tax, but a portion of the income may be   
subject to state and local taxes. Risk varies by bond quality.                  

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                                              

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                                                      

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 High Yield Tax-Exempt Fund                                                  

Invests in a Portfolio comprised primarily of 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 Intermediate Tax-Exempt Fund                                                

Invests in mainly investment-grade bonds and other debt securities with         
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.               

(icon of) shield with tree enclosed                                             

Money market funds                                                              

These money market funds have three main goals: conservation of capital,        
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by   
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.     

IDS Cash Management Fund                                                        

Invests in such money market securities as high quality commercial paper,       
bankers' acceptances, certificates of deposit (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                                       

PAGE                                                                            
Quick telephone reference                                                       

American Express Telephone Transaction Service                                  

Redemptions and exchanges, dividend payments or reinvestments and               
automatic payment arrangements                                                  

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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 (TouchTone(R) 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                                                                        

AMERICAN EXPRESS FINANCIAL ADVISORS                                             

IDS State Tax-Exempt Funds                                                      
IDS Tower 10                                                                    
Minneapolis, MN 55440-0010                                                      

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-30D’ Filing		Date		First		Last			Other Filings
Filed on:		2/24/97
For Period End:		12/31/96		2		54			N-30D,  NSAR-A
		7/1/96		2		7
		6/30/96		2		24			24F-2NT,  N-30D,  NSAR-B,  NSAR-B/A
		3/20/95		21		36
									List all Filings