Tax-exempt interest dividend in California

The Franchise Tax Board states, "If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax." Only 5.88% of my tax-exempt interest dividend is from CA, but the rest is from US obligations. Why, then, is that tax-exempt interest dividend added to my income in CA, and therefore, being taxed?

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