The fund may hold Tax-exempt bonds where their Dividends are exempt...but not the Capital Gains themselves.
Anything in box 2a on the 1099-DIV would be taxable.
What is in box 10 of that 1099-DIV will not be Federally taxable, but will be mostly taxed by your state, (unless the bond fund owns a significant % of your own state's bonds, or perhaps if you live in a non-income taxing state).
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OF course, "Never say Never". Someone may think of an exception and post it here.
(like, a couple states have some partial Capital Gains exemptions, but that doesn't apply to Federal)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
