497 1 filing1096.htm PRIMARY DOCUMENT

TF2 P1 09/16

 

 

SUPPLEMENT DATED SEPTEMBER 15, 2016

TO THE PROSPECTUS DATED JULY 1, 2016

OF

FRANKLIN ALABAMA TAX-FREE INCOME FUND

FRANKLIN FLORIDA TAX-FREE INCOME FUND

FRANKLIN GEORGIA TAX-FREE INCOME FUND

FRANKLIN KENTUCKY TAX-FREE INCOME FUND

FRANKLIN LOUISIANA TAX-FREE INCOME FUND

(each, a series of Franklin Tax Free Trust (Trust))

 

Effective on September 15, 2016, the Franklin Alabama Tax-Free Income Fund, Franklin Florida Tax-Free Income Fund, Franklin Georgia Tax-Free Income Fund, Franklin Kentucky Tax-Free Income Fund and Franklin Louisiana Tax-Free Income Fund (each, a Fund and together, the Funds) will begin offering Advisor Class of shares.  Therefore, the prospectus of the Funds is amended as follows:

I.          The table listing each Fund and its classes on the cover of the prospectus is replaced with the following:

 

Class A

Class C

Advisor Class

Franklin Alabama Tax-Free Income Fund

FRALX

FALEX

Pending

Franklin Florida Tax-Free Income Fund

FRFLX

FRFIX

Pending

Franklin Georgia Tax-Free Income Fund

FTGAX

FGAIX

Pending

Franklin Kentucky Tax-Free Income Fund

FRKYX

-

Pending

Franklin Louisiana Tax-Free Income Fund

FKLAX

FLAIX

Pending

II.         In the Fund Summary for the Franklin Alabama Tax-Free Income Fund, the “Shareholder Fees” and “Annual Fund Operating Expenses” tables on page 2 of the prospectus are replaced with the following:

Shareholder Fees

(fees paid directly from your investment)

 

Class A

Class C

Advisor Class

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

4.25%

None

None

Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds)

None1

1.00%

None

1.  There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see "Investments of $1 Million or More" under "Choosing a Share Class") and purchases by certain retirement plans without an initial sales charge.

1

 

 

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

 

Class A

Class C

Advisor Class

Management Fees

0.54%

0.54%

0.54%

Distribution and service (12b-1) fees

0.10%

0.65%

None

Other expenses1

0.07%

0.07%

0.07%

Total annual fund operating expenses

0.71%

1.26%

0.61%

1.  “Other expenses” for Advisor Class are estimated based on the current expenses of each Fund’s existing classes.

III.       In the Fund Summary for the Franklin Alabama Tax-Free Income Fund, the “Example” table on page 3 of the prospectus is replaced with the following:

 

1 Year

3 Years

5 Years

10 Years

Class A

$494

$642

$802

$1,268

Class C

$228

$399

$691

$1,520

Advisor Class

$62

$195

$339

$760

If you do not sell your shares:

 

 

 

 

Class C

$128

$399

$691

$1,520

IV.       In the Fund Summary for the Franklin Alabama Tax-Free Income Fund, the “Average Annual Total Return” table on page 7 of the prospectus is replaced with the following:

Average Annual Total Returns
(figures reflect sales charges)

For the periods ended December 31, 2015

   

1 Year 

5 Years 

10 Years 

Franklin Alabama Tax-Free Income Fund - Class A   

 

 

 

         Return Before Taxes 

-3.05% 

4.23% 

3.54% 

         Return After Taxes on Distributions 

-3.05% 

4.22% 

3.54% 

         Return After Taxes on Distributions and Sale of Fund Shares 

-0.16% 

4.18% 

3.64% 

Franklin Alabama Tax-Free Income Fund - Class C   

-0.24% 

4.58% 

3.42% 

Franklin Alabama Tax-Free Income Fund – Advisor Class

1.22% 

5.13% 

3.99% 

Barclays Municipal Bond Index (index reflects no deduction for fees, expenses or taxes) 

3.30% 

5.35% 

4.72% 

Historical performance for Advisor Class shares prior to their inception is based on the performance of Class A shares. Advisor Class performance has been adjusted to reflect differences in sales charges between classes.

V.        In the Fund Summary for the Franklin Alabama Tax-Free Income Fund, the paragraph under “Purchase and Sale of Fund Shares” on page 8 of the prospectus is replaced with the following:

You may purchase or redeem shares of the Fund on any business day online through our website at franklintempleton.com, by mail (Franklin Templeton Investor Services, P.O. Box 997151, Sacramento, CA 95899-7151), or by telephone at (800) 632‑2301. For Class A and C, the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Advisor Class is only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under “Your Account – Choosing a Share Class – Qualified Investors – Advisor Class” in the Fund's prospectus.  There is no minimum investment for subsequent purchases.

2

 

 

VI.       In the Fund Summary for the Franklin Florida Tax-Free Income Fund, the “Shareholder Fees” and “Annual Fund Operating Expenses” tables on page 9 of the prospectus are replaced with the following:

Shareholder Fees

(fees paid directly from your investment)

 

Class A

Class C

Advisor Class

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

4.25%

None

None

Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds)

None1

1.00%

None

1.  There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see "Investments of $1 Million or More" under "Choosing a Share Class") and purchases by certain retirement plans without an initial sales charge.

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

 

Class A

Class C

Advisor Class

Management Fees

0.48%

0.48%

0.48%

Distribution and service (12b-1) fees

0.10%

0.65%

None

Other expenses1

0.06%

0.06%

0.06%

Total annual fund operating expenses

0.64%

1.19%

0.54%

1.  “Other expenses” for Advisor Class are estimated based on the current expenses of each Fund’s existing classes.

VII.      In the Fund Summary for Franklin Florida Tax-Free Income Fund, the “Example” table on page 10 of the prospectus is replaced with the following:

 

1 Year

3 Years

5 Years

10 Years

Class A

$488

$621

$767

$1,189

Class C

$221

$378

$654

$1,443

Advisor Class

$55

$173

$302

$677

If you do not sell your shares:

 

 

 

 

Class C

$121

$378

$654

$1,443

3

 

 

VIII.     In the Fund Summary for the Franklin Florida Tax-Free Income Fund, the “Average Annual Total Return” table on page 14 of the prospectus is replaced with the following:

Average Annual Total Returns
(figures reflect sales charges)

For the periods ended December 31, 2015

   

1 Year 

5 Years 

10 Years 

Franklin Florida Tax-Free Income Fund - Class A   

 

 

 

         Return Before Taxes 

-1.82% 

3.49% 

3.43% 

         Return After Taxes on Distributions 

-1.82% 

3.47% 

3.41% 

         Return After Taxes on Distributions and Sale of Fund Shares 

0.66% 

3.67% 

3.62% 

Franklin Florida Tax-Free Income Fund - Class C   

1.04% 

3.84% 

3.32% 

Franklin Florida Tax-Free Income Fund – Advisor Class 

2.53% 

4.39% 

3.88% 

Barclays Municipal Bond Index (index reflects no deduction for fees, expenses or taxes) 

3.30% 

5.35% 

4.72% 

Historical performance for Advisor Class shares prior to their inception is based on the performance of Class A shares. Advisor Class performance has been adjusted to reflect differences in sales charges between classes.

IX.       In the Fund Summary for the Franklin Florida Tax-Free Income Fund, the paragraph under “Purchase and Sale of Fund Shares” on page 14 of the prospectus is replaced with the following:

You may purchase or redeem shares of the Fund on any business day by mail (Franklin Templeton Investor Services, P.O. Box 997151, Sacramento, CA 95899-7151), or by telephone at (800) 632-2301. For Class A and C, the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Advisor Class is only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under “Your Account – Choosing a Share Class – Qualified Investors – Advisor Class” in the Fund's prospectus.  There is no minimum investment for subsequent purchases.

X.        In the Fund Summary for the Franklin Georgia Tax-Free Income Fund, the “Shareholder Fees” and “Annual Fund Operating Expenses” tables on page 16 of the prospectus are replaced with the following:

Shareholder Fees

(fees paid directly from your investment)

 

Class A

Class C

Advisor Class

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

4.25%

None

None

Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds)

None1

1.00%

None

4

 

 

1.  There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see "Investments of $1 Million or More" under "Choosing a Share Class") and purchases by certain retirement plans without an initial sales charge.

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

 

Class A

Class C

Advisor Class

Management Fees

0.50%

0.50%

0.50%

Distribution and service (12b-1) fees

0.10%

0.65%

None

Other expenses1

0.07%

0.07%

0.07%

Total annual fund operating expenses

0.67%

1.22%

0.57%

1.  “Other expenses” for Advisor Class are estimated based on the current expenses of each Fund’s existing classes.

XI.       In the Fund Summary for the Franklin Georgia Tax-Free Income Fund, the “Example” table on page 17 of the prospectus is replaced with the following:

 

1 Year

3 Years

5 Years

10 Years

Class A

$491

$630

$782

$1,224

Class C

$224

$387

$670

$1,477

Advisor Class

$58

$183

$318

$714

If you do not sell your shares:

 

 

 

 

Class C

$124

$387

$670

$1,477

XII.      In the Fund Summary for the Franklin Georgia Tax-Free Income Fund, the “Average Annual Total Return” table on page 21 of the prospectus is replaced with the following:

Average Annual Total Returns
(figures reflect sales charges)

For the periods ended December 31, 2015

   

1 Year 

5 Years 

10 Years 

Franklin Georgia Tax-Free Income Fund - Class A   

 

 

 

         Return Before Taxes 

-2.19% 

4.36% 

3.75% 

         Return After Taxes on Distributions 

-2.19% 

4.36% 

3.75% 

         Return After Taxes on Distributions and Sale of Fund Shares 

0.29% 

4.26% 

3.79% 

Franklin Georgia Tax-Free Income Fund - Class C   

0.48% 

4.69% 

3.63% 

Franklin Georgia Tax-Free Income Fund – Advisor Class 

2.13% 

5.28% 

4.21% 

Barclays Municipal Bond Index (index reflects no deduction for fees, expenses or taxes) 

3.30% 

5.35% 

4.72% 

5

 

 

Historical performance for Advisor Class shares prior to their inception is based on the performance of Class A shares. Advisor Class performance has been adjusted to reflect differences in sales charges between classes.

XIII.     In the Fund Summary for the Franklin Georgia Tax-Free Income Fund, the paragraph under “Purchase and Sale of Fund Shares” on page 21 of the prospectus is replaced with the following:

You may purchase or redeem shares of the Fund on any business day by mail (Franklin Templeton Investor Services, P.O. Box 997151, Sacramento, CA 95899-7151), or by telephone at (800) 632‑2301. For Class A and C, the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Advisor Class is only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under “Your Account – Choosing a Share Class – Qualified Investors – Advisor Class” in the Fund's prospectus.  There is no minimum investment for subsequent purchases.

XIV.    In the Fund Summary for the Franklin Kentucky Tax-Free Income Fund, the “Shareholder Fees” and “Annual Fund Operating Expenses” tables on page 23 of the prospectus are replaced with the following:

Shareholder Fees

(fees paid directly from your investment)

 

Class A

Advisor Class

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

4.25%

None

Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds)

None1

None

1.  There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see "Investments of $1 Million or More" under "Choosing a Share Class") and purchases by certain retirement plans without an initial sales charge.

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

 

Class A

Advisor Class

Management Fees

0.57%

0.57%

Distribution and service (12b-1) fees

0.10%

None

Other expenses1

0.09%

0.09%

Total annual fund operating expenses

0.76%

0.66%

1.  “Other expenses” for Advisor Class are estimated based on the current expenses of each Fund’s existing classes.

XV.      In the Fund Summary for the Franklin Kentucky Tax-Free Income Fund, the “Example” table on page 24 of the prospectus is replaced with the following:

 

1 Year

3 Years

5 Years

10 Years

Class A

$500

$659

$832

$1,332

Advisor Class

$68

$212

$370

$827

6

 

 

XVI.    In the Fund Summary for the Franklin Kentucky Tax-Free Income Fund, the “Average Annual Total Return” table on page 28 of the prospectus is replaced with the following:

Average Annual Total Returns
(figures reflect sales charges)

For the periods ended December 31, 2015

   

1 Year 

5 Years 

10 Years 

Franklin Kentucky Tax-Free Income Fund - Class A   

 

 

 

         Return Before Taxes 

-2.75% 

3.85% 

3.52% 

         Return After Taxes on Distributions 

-2.75% 

3.85% 

3.52% 

         Return After Taxes on Distributions and Sale of Fund Shares 

-0.03% 

3.86% 

3.61% 

Franklin Kentucky Tax-Free Income Fund – Advisor Class

1.56% 

4.75% 

3.97% 

Barclays Municipal Bond Index (index reflects no deduction for fees, expenses or taxes) 

3.30% 

5.35% 

4.72% 

Historical performance for Advisor Class shares prior to their inception is based on the performance of Class A shares. Advisor Class performance has been adjusted to reflect differences in sales charges between classes.

XVII.   In the Fund Summary for the Franklin Kentucky Tax-Free Income Fund, the following sentence is added to the paragraph under “the “Average Annual Total Return” table on page 28 of the prospectus is replaced with the following:

After-tax returns are shown only for Class A and after-tax returns for other classes will vary.

XVIII.  In the Fund Summary for the Franklin Kentucky Tax-Free Income Fund, the paragraph under “Purchase and Sale of Fund Shares” on page 28 of the prospectus is replaced with the following:

You may purchase or redeem shares of the Fund on any business day by mail (Franklin Templeton Investor Services, P.O. Box 997151, Sacramento, CA 95899-7151), or by telephone at (800) 632‑2301. For Class A, the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Advisor Class is only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under “Your Account – Choosing a Share Class – Qualified Investors – Advisor Class” in the Fund's prospectus.  There is no minimum investment for subsequent purchases.

XIX.    In the Fund Summary for the Franklin Louisiana Tax-Free Income Fund, the “Shareholder Fees” and “Annual Fund Operating Expenses” tables on page 30 of the prospectus are replaced with the following:

Shareholder Fees

(fees paid directly from your investment)

 

Class A

Class C

Advisor Class

Maximum Sales Charge (Load) Imposed on Purchases (as percentage of offering price)

4.25%

None

None

Maximum Deferred Sales Charge (Load) (as percentage of the lower of original purchase price or sale proceeds)

None1

1.00%

None

7

 

 

1.  There is a 0.75% contingent deferred sales charge that applies to investments of $1 million or more (see "Investments of $1 Million or More" under "Choosing a Share Class") and purchases by certain retirement plans without an initial sales charge.

Annual Fund Operating Expenses

(expenses that you pay each year as a percentage of the value of your investment)

 

Class A

Class C

Advisor Class

Management Fees

0.51%

0.51%

0.51%

Distribution and service (12b-1) fees

0.10%

0.65%

None

Other expenses1

0.08%

0.08%

0.08%

Total annual fund operating expenses

0.69%

1.24%

0.59%

1.  “Other expenses” for Advisor Class are estimated based on the current expenses of each Fund’s existing classes.

XX.      In the Fund Summary for the Franklin Louisiana Tax-Free Income Fund, the “Example” table on page 31 of the prospectus is replaced with the following:

 

1 Year

3 Years

5 Years

10 Years

Class A

$492

$636

$792

$1,245

Class C

$226

$393

$680

$1,498

Advisor Class

$60

$188

$328

$735

If you do not sell your shares:

 

 

 

 

Class C

$126

$393

$680

$1,498

XXI.    In the Fund Summary for the Franklin Louisiana Tax-Free Income Fund, the “Average Annual Total Return” table on page 35 of the prospectus is replaced with the following:

Average Annual Total Returns
(figures reflect sales charges)

For the periods ended December 31, 2015

   

1 Year 

5 Years 

10 Years 

Franklin Louisiana Tax-Free Income Fund - Class A   

 

 

 

         Return Before Taxes 

-1.73% 

4.12% 

3.67% 

         Return After Taxes on Distributions 

-1.73% 

4.12% 

3.67% 

         Return After Taxes on Distributions and Sale of Fund Shares 

0.61% 

4.09% 

3.75% 

Franklin Louisiana Tax-Free Income Fund - Class C   

1.02% 

4.45% 

3.56% 

Franklin Louisiana Tax-Free Income Fund – Advisor Class

2.60% 

5.02% 

4.12% 

Barclays Municipal Bond Index (index reflects no deduction for fees, expenses or taxes) 

3.30% 

5.35% 

4.72% 

8

 

 

Historical performance for Advisor Class shares prior to their inception is based on the performance of Class A shares. Advisor Class performance has been adjusted to reflect differences in sales charges between classes.

XXII.   In the Fund Summary for the Franklin Louisiana Tax-Free Income Fund, the paragraph under “Purchase and Sale of Fund Shares” on page 36 of the prospectus is replaced with the following:

You may purchase or redeem shares of the Fund on any business day by mail (Franklin Templeton Investor Services, P.O. Box 997151, Sacramento, CA 95899-7151), or by telephone at (800) 632‑2301. For Class A and C, the minimum initial purchase for most accounts is $1,000 (or $50 under an automatic investment plan). Advisor Class is only available to certain qualified investors and the minimum initial investment will vary depending on the type of qualified investor, as described under “Your Account – Choosing a Share Class – Qualified Investors – Advisor Class” in the Fund's prospectus.  There is no minimum investment for subsequent purchases.

XXIII.  On page 108 of the prospectus, under “Your Account - Choosing a Share Class” Initial Sales Charge table, a paragraph is added as follows:

The Franklin Alabama, Florida, Georgia, Kentucky and Louisiana Tax-Free Income Funds began offering Advisor Class shares on September 15, 2016.

Please keep this supplement with your prospectus for future reference.

9