Click here to view the 2007 tax guide.

Income from U.S. Government Obligations

Some states do not tax their residents on income received from a mutual fund that is earned from U.S. Government Obligations.  The following table shows the percentage of total ordinary income dividends that was attributable to interest earned from direct U.S. Government Obligations:

	% of Income Attributable to Direct U.S. Govt.
Fund Name	Obligations
Buffalo Balanced Fund	5.77%
Buffalo High Yield Fund	6.26%
Buffalo Large Cap Fund	12.21%
Buffalo Micro Cap Fund	19.69%
Buffalo Mid Cap Fund	16.62%
Buffalo Science & Technology Fund	10.53%
Buffalo Small Cap Fund	10.80%
Buffalo USA Global Fund	22.58%
Buffalo Jayhawk China Fund	1.59%

Depending on your state.s personal income tax laws, you may be entitled to declare the above portion of your 2007 ordinary income dividends (Box 1) as tax-exempt income on your state personal income tax return.  However, some states do not allow the .pass through. of this exempt-interest income unless the percentage earned from U.S. Government Obligations exceeds certain thresholds or unless other requirements are met.  Please consult your tax adviser or state authorities if you have any questions regarding the percentage of income you can exclude when calculating your state income tax.
 

Income from Foreign Sources subject to Foreign Tax Credit:
For the year ended December 31, 2007, the Buffalo JayHawk China Fund earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code as follows:
	Country	Gross Dividend Per Share	Taxes Withheld Per Share
		Per Share	Per Share
	China	0.0115	0.0010	8.42%
	Hong Kong	0.1411	0.0011	0.74%