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COLUMBIA FUNDS SERIES TRUST - Notes to Mutual Funds Financial Statements - 6-7-2007 by CCERX-Agreements


									Note 1. Organization

Columbia Funds Series Trust (the "Trust"), is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment
company. Information presented in these financial statements pertains to the following series of the Trust (each a "Fund" and collectively, the "Funds"):

Columbia Short Term Municipal Bond Fund
  Columbia California Intermediate Municipal Bond Fund 
  Columbia Georgia Intermediate Municipal Bond Fund 
  Columbia Maryland Intermediate Municipal Bond Fund 
  Columbia North Carolina Intermediate Municipal Bond Fund 
Columbia South Carolina Intermediate Municipal Bond Fund
Columbia Virginia Intermediate Municipal Bond Fund

Columbia Short Term Municipal Bond Fund is a diversified fund. Columbia Maryland Intermediate Municipal Bond Fund is a non-diversified fund. Each of the
remaining Funds operates as a diversified fund.

Investment Goals

Columbia Short Term Municipal Bond Fund seeks high current income exempt from federal income tax consistent with minimal fluctuation of principal. Each of the
Intermediate Municipal Bond Funds seeks high current income exempt from federal income tax and the respective state income tax consistent with moderate fluctuation
of principal.

Fund Shares

The Trust may issue an unlimited number of shares and each offers four classes of shares: Class A, Class B, Class C and Class Z shares. Each share class has its own
expense structure and, as applicable sales charges.

Class A shares are subject to a maximum front-end sales charge of 1.00% for Columbia Short Term Municipal Bond Fund and 3.25% for the Intermediate Municipal
Bond Funds, based on the amount of initial investment. Class A shares purchased without an initial sales charge in accounts aggregating $1 million to $50 million at
the time of purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") if the shares are sold within twelve months of the time of the purchase. Class B
shares of the Intermediate Municipal Bond Funds are subject to a maximum CDSC of 3.00% based upon the holding period after purchase. Class B shares will convert
to Class A shares eight years after purchase. Class C shares are subject to a 1.00% CDSC on shares sold within twelve months of purchase. Class Z shares are offered
continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in the Funds' prospectus.

Note 2. Significant Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Funds in the preparation of their financial statements.

Security Valuation

Debt securities generally are valued by pricing services approved by the Trust's Board of Trustees, based upon market transactions for normal, institutional-size trading
units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type
of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the -counter or
exchange bid quotation. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments in other open-
end investment companies are valued at net asset value.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Investments for which market
quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under
consistently applied procedures established by and under the general supervision of the Board of Trustees. If a security is valued at "fair value",

Municipal Bond Funds, March 31, 2007

such value is likely to be different from the last quoted market price for the security.

In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("SFAS 157"), was issued. SFAS 157 is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value
measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds' financial statement disclosures.

Security Transactions

Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial
statement and federal income tax purposes.

Futures Contracts

The Funds may invest in futures contracts to seek to enhance return, to hedge some of the risks of its investments in fixed income securities or as a substitute for a
position in the underlying asset. The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the
instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the
instrument or the underlying securities, or (3) an inaccurate prediction by Columbia Management Advisors, LLC ("Columbia"), the Funds' investment advisor, of the
future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds' Statements of Assets and Liabilities at
any given time.

Upon entering into a futures contract, each Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent
payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in
unrealized gains or losses. The Funds recognize a realized gain or loss when the contract is closed or expires.

Delayed Delivery Securities

The Funds may trade securities on other than normal settlement terms, including securities purchased or sold on a "when-issued" basis. This may increase the risk if the
other party to the transaction fails to deliver and causes the Funds to subsequently invest at less advantageous prices. Each Fund holds until settlement date, in a
segregated account, cash or liquid securities in an amount equal to the delayed delivery commitment.

Income Recognition

Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on debt securities. Dividend income is recorded on the

Determination of Class Net Asset Values

All income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class
of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.

Federal Income Tax Status

Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each
calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise
tax. Therefore, no federal income or excise tax provision is recorded.

Distributions to Shareholders

Dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually.


In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund's
maximum exposure under these arrangements is unknown, because this would involve future claims against the Fund. Also, under the Trust's organizational documents
and by contract, the trustees and officers of the Trust are indemnified against

Municipal Bond Funds, March 31, 2007

certain liabilities that may arise out of actions related to their duties to the Trust. However, based on experience, the Funds expect the risk of loss due to these
representations, warranties and indemnities to be minimal.

Note 3. Federal Tax Information

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Funds' capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss
carryforwards) under income tax regulations.

For the year ended March 31, 2007, permanent book and tax basis differences resulting primarily from differing treatments for market discount reclassification
adjustments, distributions reclassifications, redemption based payments treated as dividends paid deduction discount accretion/premium amortization on debt securities
net operating losses, and expired capital loss carryforwards were identified and reclassified among the components of the Funds' net assets as follows:

                                                                                 Undistributed /
                                                                                 Overdistributed                    Accumulated
                                                                                 Net Investment                     Net Realized                                               
                                                                                     Income                          Gain/Loss                          Paid-In Capital
Columbia Short Term Municipal Bond Fund                                      $               (9,256)            $                 9,257             $                  (1)   
Columbia California Intermediate Municipal Bond Fund                                               (1)                                —                                1     
Columbia Georgia Intermediate Municipal Bond Fund                                            (1,062)                              1,062                               —     
Columbia Maryland Intermediate Municipal Bond Fund                                          (16,072)                             16,073                               (1)   
Columbia North Carolina Intermediate Municipal Bond Fund                                    (61,029)                             43,959                           17,070     
Columbia South Carolina Intermediate Municipal Bond Fund                                    (13,026)                             13,027                               (1)   
Columbia Virginia Intermediate Municipal Bond Fund                                          (89,473)                            102,775                          (13,302)   


Net investment income and net realized gains (losses), as disclosed on the Statements of Operations, and net assets were not affected by these reclassifications.

The tax character of distributions paid during the years ended March 31, 2007 and March 31, 2006 was as follows:

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