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RLI CORP. DIVIDENDS RULED EXCLUDABLE FROM ILLINOIS INCOME TAXES

 PEORIA, Ill., Feb. 25 /PRNewswire/ -- RLI Corp. (NYSE: RLI) announced today receipt of a favorable private letter ruling from the Illinois Department of Revenue pertaining to the state income tax treatment of dividend income received by RLI Corp. shareholders who are Illinois taxpayers.
 The Illinois Enterprise Zone Act (Section 203(a)(2)(J) of the Illinois Income Tax Act) provides that a taxpayer may deduct from taxable income an amount equal to those dividends paid by a corporation that conducts substantially all of its operations in an Enterprise Zone. RLI Corp. has represented to the Illinois Department of Revenue that it conducts substantially all of its operations in an Illinois Enterprise Zone. The Illinois Department of Revenue has agreed that dividends paid by RLI Corp. may be subtracted from Illinois Taxable Income.
 Eligible Illinois taxpayers who can utilize this dividend subtraction include individuals, corporations, partnerships, trusts and estates. The ruling received concerns only RLI Corp. dividends paid after Dec. 31, 1988. Taxpayers who previously included RLI Corp. dividends as taxable income on an Illinois Income Tax return may be able to file an amended return to recover taxes paid. When filing future returns, they should follow specific filing instructions concerning Illinois Enterprise dividend deductions to avoid overpaying Illinois State taxes.
 The amount of tax savings this ruling may generate will depend on the respective tax situations of individual taxpayers. Please consult your tax advisor on the ramifications of this ruling for your personal tax situation.
 RLI Corp. is traded on the New York Stock Exchange, symbol RLI.
 -0- 2/25/93
 /CONTACT: James E. Zogby, treasurer of RLI, 309-693-5880/
 (RLI)


CO: RLI Corp. ST: Illinois IN: SU: DIV

GK-AH -- NY018 -- 0313 02/25/93 10:39 EST
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Publication:PR Newswire
Date:Feb 25, 1993
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