# EDGAR Filing Document

**Accession Number:** 0000832705
**File Stem:** 0001104659-23-030916
**Filing Date:** 2023-3
**Character Count:** 137752
**Document Hash:** 8f1b9aeac23c9be77346f6a458aca824
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-030916.hdr.sgml**: 20230310

**ACCESSION NUMBER**: 0001104659-23-030916

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 8

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230310

**DATE AS OF CHANGE**: 20230310

**EFFECTIVENESS DATE**: 20230310

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Morgan Stanley California Tax-Free Daily Income Trust
- **CENTRAL INDEX KEY:** 0000832705
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-05554
- **FILM NUMBER:** 23721769

**BUSINESS ADDRESS:**
- **STREET 1:** 522 FIFTH AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036
- **BUSINESS PHONE:** 800-869-6397

**MAIL ADDRESS:**
- **STREET 1:** 522 FIFTH AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MORGAN STANLEY CALIF TAX FREE DAILY INCOME TRUST
- **DATE OF NAME CHANGE:** 20010618

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MORGAN STANLEY DEAN WITTER CALIF TAX FREE DAILY INCOME TRUST
- **DATE OF NAME CHANGE:** 19980622

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DEAN WITTER CALIFORNIA TAX FREE DAILY INCOME TRUST
- **DATE OF NAME CHANGE:** 19930302

## Series and Classes Contracts Data

### MORGAN STANLEY CALIF TAX FREE DAILY INCOME TRUST (Series ID: S000004055)

| Class ID   | Class Name   | Ticker Symbol   |
|:---|:---|:---|
| C000011344 | R Class      | DSCXX           |
| C000171231 | S Class      | DFSXX           |

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANIES**

Investment Company Act file number: 811-05554

Morgan Stanley California Tax-Free Daily Income Trust

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York 10036 <br> (Address of principal executive offices) (Zip code)

John H. Gernon

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

Registrant's telephone number, including area code: 212-296-0289

Date of fiscal year end: December 31,

Date of reporting period: December 31, 2022

Item 1 - Report to Shareholders

![](j2316542_aa001.jpg)

Morgan Stanley California <br>Tax-Free Daily Income Trust

Annual Report

December 31, 2022

![](j2316542_aa002.jpg)

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Table of Contents (unaudited)**

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| | |
|:---|:---|
| Welcome Shareholder | 3 |
| Fund Report | 4 |
| Expense Example | 9 |
| Portfolio of Investments | 10 |
| Statement of Assets and Liabilities | 13 |
| Statement of Operations | 14 |
| Statements of Changes in Net Assets | 15 |
| Notes to Financial Statements | 16 |
| Financial Highlights | 24 |
| Report of Independent Registered Public Accounting Firm | 26 |
| U.S. Customer Privacy Notice | 27 |
| Trustee and Officer Information | 30 |
| Federal Tax Notice | 37 |

---

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Welcome Shareholder,

We are pleased to provide this Annual Report, in which you will learn how your investment in Morgan Stanley California Tax-Free Daily Income Trust (the "Fund") performed during the latest twelve-month period. It includes an overview of the market conditions and discusses some of the factors that affected performance during the reporting period. In addition, the report contains financial statements and a list of portfolio holdings.

Morgan Stanley Investment Management is a client-centric, investor-led organization. Our global presence, intellectual capital, and breadth of products and services enable us to partner with investors to meet the evolving challenges of today's financial markets. We aim to deliver superior investment service and to empower our clients to make the informed decisions that help them reach their investment goals.

As always, we thank you for selecting Morgan Stanley Investment Management and look forward to working with you in the months and years ahead.

**This material must be preceded or accompanied by a prospectus for the fund being offered.**

**Market forecasts provided in this report may not necessarily come to pass. There is no assurance that a mutual fund will achieve its investment objective. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund and you should not expect that the sponsor will provide financial support to the Fund at any time.**

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Fund Report **(unaudited)**

For the year ended December 31, 2022

**Market Conditions**

Heightened inflation and uncertainty around the Federal Reserve's (Fed) tightening path were the focus of fixed income markets in 2022. The rate hiking cycle began in March 2022 with a 25-basis point (bps) increase, the first upward move in the target fed funds rate since 2018. In April, the Fed announced its intention to launch quantitative tightening monetary policy and then hiked 50 basis points at its May meeting. In June, the consumer price index rose to a 40-year high, prompting the Fed to hike 75 bps. Federal Reserve officials said that interest rates may need to keep rising for longer to prevent higher inflation from becoming entrenched, even if that slowed the U.S. economy. In the second half of the year, the Fed raised its benchmark rate three more times by 75 basis points and another 50 basis points in December, bringing the fed funds rate to a range of 4.25 percent to 4.50 percent at year-end, up from 0 percent to 0.25 percent at the beginning of 2022. After the December Federal Open Market Committee meeting, Fed Chairman Powell reiterated that the Fed has more work to do to bring inflation down to its target of 2 percent. This may mean more rate increases in 2023 than previously expected.

Higher interest rates caused U.S. fixed income asset classes to underperform in 2022, and municipal debt was not spared. Overall, 2022 was one of the worst years on record for municipal bonds. The Bloomberg

U.S. Municipal Bond Index lost –8.53 percent in the year, a dramatic pullback for an asset class that investors favor for its stability.<sup>(i)</sup> At the short end of the municipal curve, yields for variable rate demand obligations (VRDOs) increased significantly on the back of continued expectations of Fed rate hikes. The SIFMA Index, which measures yields for weekly VRDOs, increased from 0.10 percent at the end of 2021 to 3.66 percent at the end of 2022.<sup>(ii)</sup> Yields also rose at the longer end of the municipal money market maturity range, with the Bloomberg BVAL One-Year Note Index rising to 2.82 percent as of December 31, 2022, from 0.19 percent as of December 31, 2021.<sup>(iii)</sup>

*(i) The Bloomberg U.S. Municipal Bond Index is an index that covers the U.S. dollar-denominated long-term, tax-exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds. It is composed of approximately 1,100 bonds. "Bloomberg<sup>®</sup>" and the Bloomberg Index/Indices used are service marks of Bloomberg Finance L.P. and its affiliates, and have been licensed for use for certain purposes by Morgan Stanley Investment Management (MSIM). Bloomberg is not affiliated with MSIM, does not approve, endorse, review, or recommend any product, and. does not guarantee the timeliness, accurateness, or completeness of any data or information relating to any product.*

*(ii) Source for SIFMA data: Bloomberg LP. The SIFMA Index is issued weekly and is compiled from the weekly interest rate resets of tax-exempt variable rate issues included in a database maintained by Municipal Market Data which meet specific criteria established from time to time by the Securities Industry and Financial Markets Association. The index performance is provided for illustrative purposes only and is not meant to depict the performance of a specific investment.*

*(iii) The Bloomberg BVAL One-Year Note Index represents tax-exempt municipal bonds that have an average rating of AAA by Moody's and S&P.*

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With interest rates now meaningfully higher, municipalities are less likely to issue debt to finance projects or to refinance their outstanding debt. Total 2022 municipal bond sales volume plunged 21 percent from 2021, as issuers were flush with cash and rising interest rates curtailed advanced refundings and taxable municipal issuances, according to Bloomberg data. December 2022 municipal bond issuance, at $17.165 billion, also disappointed, dropping 58.1 percent from the same period a year earlier, according to data compiled by Bloomberg.

Despite the market's sell-off in 2022, municipal bonds closed the year with a more optimistic tone. Rates were substantially higher than the beginning of the year, attracting new investors. The positive tone has persisted into the beginning of 2023, as the market anticipates that there will be billions of dollars to reinvest with a sparse new issue calendar.

Municipal credit quality continues to remain solid and higher employment, increasing wages and rising property values have all served to bolster tax receipts. In general, municipal bonds as an asset class are also considered more defensive than most others during times of economic stress. State and local governments budget in advance, and it takes some time for economic downturns to start affecting their balance sheets — even more so for local municipalities that rely heavily on property taxes. Housing property tax receipts typically decline years after economic shocks, as it takes time for home values to be reassessed.

Uncertainty around the Federal Reserve, the Treasury market and the geopolitical landscape will likely continue to weigh on the market. Municipal yield movements are closely tracking the Treasury market's high volatility, and it will likely require a calming of that volatility, as well as a more favorable technical municipal backdrop, to reignite persistent market conviction and sustained outperformance. As the Fed moves ahead with aggressive rate hikes based on potentially lagging economic data, the risk of a policy error grows.

The Federal Bureau of Labor Statistics employment data shows that the California economy generated month-over-month growth in non-farm jobs in each of the first 11 months of 2022. Over this 11-month period, the state added over 600,000 net new jobs. Such positive growth helped the state recover all of the jobs lost or furloughed at the start of the pandemic, returning the state's unemployment rate to pre-pandemic record low levels.

The recovery of the California economy since the pandemic helped the state close the fiscal year ended June 30, 2022 with an estimated $97 billion surplus in the general fund, per the California Department of Finance. General fund revenues exceeded budget estimates by nearly 30 percent, and the state estimated its combined budget stabilization account/rainy day fund balance as of June 30, 2022, at $20.3 billion, or 10 percent of total general fund revenues.

The state and its economy benefited from the more than $600 billion the state and local governments (including

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schools), its citizens and businesses received in pandemic-related federal stimulus funding.

On June 27, 2022, the state enacted its fiscal 2022-23 annual budget with roughly $220 billion in general fund revenues and anticipates ending the fiscal year with reserves totaling $23.2 billion. The State of California Department of Finance's most recent monthly cash report shows that revenue collections through the first five months of the current fiscal year (July to November 2022) came in $1.1 billion above the enacted budget estimate. Given the state's progressive personal income tax structure, collections can be volatile with changes in stock market valuations as personal income tax collections account for 61 percent of total general fund revenues. But California's economic rebound has helped drive corporate and sales tax collections through November 2022 to exceed budget estimates, offsetting the minimal 0.1 percent decline in personal income tax collections.

**Performance Analysis**

As of December 31, 2022, Morgan Stanley California Tax-Free Daily Income Trust had net assets of approximately $14.2 million and an average portfolio maturity of 11 days. For the 12-month period ended December 31, 2022, the Fund's Class R and Class S shares provided a total return of 0.79 percent. For the seven-day period ended December 31, 2022, each of

the Fund's Class R and Class S shares provided an effective annualized yield of 2.80 percent (subsidized) and 0.21 percent (non-subsidized) and a current yield of 2.76 percent (subsidized) and 0.21 percent (non-subsidized), while the 30-day moving average yield for December was 2.42 percent (subsidized) and 0.01 percent (non-subsidized). Yield quotations more closely reflect the current earnings of the Fund. The non-subsidized yield reflects what the yield would have been had a fee and/or expense waiver not been in place during the period. *Past performance is no guarantee of future results.*

We believe the portfolio is well positioned for a rising rate environment, with a short duration and high concentrations in VRDOs and floating-rate securities. We continue to hold a bias for higher quality assets overall and continue to advocate careful security selection. We have a preference for essential service revenue issues like water & sewer, public power, and health care.

*There is no guarantee that any sectors mentioned will continue to perform as discussed herein or that securities in such sectors will be held by the Fund in the future.*

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---

| | |
|:---|:---|
| **PORTFOLIO COMPOSITION as of 12/31/22** | **PORTFOLIO COMPOSITION as of 12/31/22** |
| Weekly Variable Rate Bonds | 55.1% |
| Daily Variable Rate Bonds | 25.8 |
| Commercial Paper | 13.5 |
| Closed-End Investment Company | 4.2 |
| U.S. Agency Security | 1.4 |
| **MATURITY SCHEDULE as of 12/31/22** | **MATURITY SCHEDULE as of 12/31/22** |
| 1 - 30 Days | 86.6% |
| 31 - 60 Days | 13.4 |

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*Subject to change daily. Provided for informational purposes only and should not be deemed as a recommendation to buy or sell the types of securities mentioned above. All percentages for portfolio composition and maturity schedule are stated as a percentage of total investments.*

*Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.*

**Investment Strategy**

**The Fund will normally invest at least 80 percent of its net assets in high quality, short-term securities that are municipal obligations that pay interest exempt from federal and California income taxes. The Fund's "Adviser," Morgan Stanley Investment Management Inc., seeks to maintain the Fund's share price at $1.00. The share price remaining stable at $1.00 means that the Fund would preserve the principal value of your investment.**

***An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.***

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**For More Information About Portfolio Holdings**

**Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its Semi-Annual and Annual Reports within 60 days of the end of the fund's second and fourth fiscal quarters. The Semi-Annual Reports and the Annual Reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the Semi-Annual and Annual Reports to fund shareholders and makes these reports available on its public website, www.morganstanley.com/im/moneymarketfundsshareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters as an attachment to Form N-PORT and monthly holdings for each money market fund on Form N-MFP. Morgan Stanley does not deliver these reports to shareholders, but makes the complete schedule of portfolio holdings for the fund's first and third fiscal quarters available on its public website. The holdings for each money market fund are also posted to the Morgan Stanley public website. You may obtain the Form N-PORT filings (as well as the Form N-CSR, N-CSRS and N-MFP filings) by accessing the SEC's website, http://www.sec.gov. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov).**

**Householding Notice**

**To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling 1 (800) 869-6397, 8:00 a.m. to 6:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.**

**Proxy Voting Policy and Procedures and Proxy Voting Record**

**You may obtain a copy of the Fund's Proxy Voting Policy and Procedures without charge, upon request, by calling toll free 1 (800) 869-6397 or by visiting the Mutual Fund Center on our website at www.morganstanley.com/im/moneymarketfundsshareholderreports. It is also available on the SEC's website at http://www.sec.gov.**

**You may obtain information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 without charge by visiting the Mutual Fund Center on our website at www.morganstanley.com/im/moneymarketfundsshareholderreports.This information is also available on the SEC's website at http://www.sec.gov**

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Expense Example **(unaudited)**

As a shareholder of the Fund, you incur ongoing costs, including advisory fees, administration fees, shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 07/01/22 – 12/31/22.

**Actual Expenses**

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

**Hypothetical Example for Comparison Purposes**

The second line of the table below provides information about hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds that have transactional costs, such as sales charges (loads) or exchange fees.

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| | | | |
|:---|:---|:---|:---|
| | **Beginning<br>Account Value** | **Ending<br>Account Value** | **Expenses Paid<br>During Period<sup>(1)</sup>** |
| | **07/01/22** | **12/31/22** | **07/01/22 –<br>12/31/22** |
| **R Class** | **R Class** | **R Class** | **R Class** |
| Actual (0.70% return) | $1000.00 | $1006.98 | $1.02 |
| Hypothetical (5% annual return before expenses) | $1000.00 | $1024.46 | $1.03 |
| **S Class** | **S Class** | **S Class** | **S Class** |
| Actual (0.70% return) | $1000.00 | $1006.98 | $1.02 |
| Hypothetical (5% annual return before expenses) | $1000.00 | $1024.46 | $1.03 |

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&nbsp;&nbsp;&nbsp;&nbsp;*(1) Expenses are equal to the Fund's annualized expense ratios of 0.20% and 0.20% for R Class and S Class shares, respectively, multiplied by the average account value over the period and multiplied by 186\*\*/365 (to reflect the one-half year period). If the Fund had borne all of its expenses, the annualized expense ratios would have been 2.02% and 2.02% for R Class and S Class shares, respectively.*

&nbsp;&nbsp;&nbsp;&nbsp;*\*\* Adjusted to reflect non-business days accruals.*

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Portfolio of Investments** ◼ **December 31, 2022**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **PRINCIPAL<br>AMOUNT<br>(000)** | **<br>**  | **COUPON<br>RATE** | **DEMAND<br>DATE** | **MATURITY<br>DATE (a)** | **VALUE** |
| | **Weekly Variable Rate Bonds (b)(55.1%)** | **Weekly Variable Rate Bonds (b)(55.1%)** | **Weekly Variable Rate Bonds (b)(55.1%)** | **Weekly Variable Rate Bonds (b)(55.1%)** | **Weekly Variable Rate Bonds (b)(55.1%)** |
| $600 | Bay Area Toll Authority, CA, San Francisco <br>Bay Area Toll Bridge 2007 Ser D2 | 3.15% | 01/06/23 | 04/01/47 | $600000 |
| 600 | California Educational Facilities Authority, <br>California Institute of Technology 2006 Ser A | 3.24 | 01/06/23 | 10/01/36 | 600000 |
| 600 | California Health Facilities Financing Authority, <br>Catholic Healthcare West Ser 2011 B | 3.35 | 01/06/23 | 03/01/47 | 600000 |
| 600 | California Health Facilities Financing Authority, <br>Scripps Health Ser 2010 B | 2.70 | 01/06/23 | 10/01/40 | 600000 |
| 600 | California Pollution Control Financing Authority, <br>Solid Waste Disposal Revenue Bonds <br>Seri 2018A, AMT | 3.56 | 01/06/23 | 09/01/38 | 600000 |
| 600 | California Statewide Communities <br>Development Authority, Rady <br>Children's Hospital Ser 2008 C | 3.15 | 01/06/23 | 08/15/36 | 600000 |
| 600 | City of Riverside, CA, California Variable Rate <br>Refunding Electric Revenue Bonds, <br>Ser 2008C | 3.33 | 01/06/23 | 10/01/35 | 600000 |
| 600 | Rancho California Water District Community <br>Facilities District No 89-5, CA, Ser 1998 | 3.33 | 01/06/23 | 09/01/28 | 600000 |
| 600 | Sacramento Transportation Authority, CA, <br>Measure A Sales Tax Revenue Refunding Bonds <br>Seri 2014A | 3.05 | 01/06/23 | 10/01/38 | 600000 |
| 600 | San Diego County Regional Transportation <br>Commission, CA, Sales Tax 2008 Ser B | 2.94 | 01/06/23 | 04/01/38 | 600000 |
| 600 | San Francisco City & County Airports Commission, <br>CA, San Francisco International Airport <br>Ser 2018 B, Series B | 3.10 | 01/06/23 | 05/01/58 | 600000 |
| 600 | Santa Clara Valley Transportation Authority, CA, <br>Measure A Sales Tax Ser 2008 B | 3.21 | 01/06/23 | 04/01/36 | 600000 |
| 600 | Western Municipal Water District Facilities <br>Authority, CA, Seri 2012 A | 2.85 | 01/06/23 | 10/01/42 | 600000 |
|  | **Total Weekly Variable Rate Bonds** *(Cost $7,800,000)* |  |  |  | 7800000 |
|  | **Daily Variable Rate Bonds (b)(25.8%)** | **Daily Variable Rate Bonds (b)(25.8%)** | **Daily Variable Rate Bonds (b)(25.8%)** | **Daily Variable Rate Bonds (b)(25.8%)** | **Daily Variable Rate Bonds (b)(25.8%)** |
| 600 | California Municipal Finance Authority Recovery <br>Zone Facility Bonds, Chevron USA ,Inc. Project, <br>Ser 2010A | 3.05 | 01/03/23 | 11/01/35 | 600000 |

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See Notes to Financial Statements<br>10

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Portfolio of Investments** ◼ **December 31, 2022** *continued*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **PRINCIPAL<br>AMOUNT<br>(000)** | **<br>**  | **COUPON<br>RATE** | **DEMAND<br>DATE** | **MATURITY<br>DATE (a)** | **VALUE** | **VALUE** |
| $600 | Eastern Municipal Water District, CA, <br>Water & Wastewater Refrigerated <br>Ser 2018 A, Series A | 2.58% | 01/03/23 | 07/01/46 | $| 600000 |
| 700 | Irvine Assessment District No 97-17, CA, <br>Improvement Bond Act 1915 (c) | 2.70 | 01/03/23 | 09/02/23 |  | 700000 |
| 500 | Los Angeles Department of Water & Power, CA, <br>Revenue Variable Revenue Bonds <br>Ser 2021 A-2 | 2.20 | 01/03/23 | 07/01/51 |  | 500000 |
| 650 | University of California Regents, CA, <br>Medical Center Pooled Ser 2007 B-2 | 2.55 | 01/03/23 | 05/15/32 |  | 650000 |
| 600 | University of California Regents, CA, <br>Ser 2013 AL-3 | 2.40 | 01/03/23 | 05/15/48 |  | 600000 |
|  | **Total Daily Variable Rate Bonds** *(Cost $3,650,000)* |  |  |  |  | 3650000 |
|  |  |  | **YIELD TO<br>MATURITY<br>ON DATE OF<br>PURCHASE** |  |  |  |
|  | **Commercial Paper (13.4%)** | **Commercial Paper (13.4%)** | **Commercial Paper (13.4%)** | **Commercial Paper (13.4%)** | **Commercial Paper (13.4%)** | **Commercial Paper (13.4%)** |
| 500 | California State IAM Commmercial Paper <br>Nts 3/A2 Ser A-7 IAM 117 | 2.50 | 2.50% | 02/07/23 |  | 500000 |
| 700 | Golden Gate Bridge | 2.25 | 2.25 | 02/02/23 |  | 700000 |
| 700 | San Francisco California City and Country Pub <br>Utilities Communications Waste Water Revenue, <br>CA, IAM Commercial Paper | 2.15 | 2.15 | 02/08/23 |  | 700000 |
|  | **Total Commercial Paper** *(Cost $1,900,000)* |  |  |  |  | 1900000 |
|  |  |  | **DEMAND<br>DATE (a)** |  |  |  |
|  | **Closed-End Investment Company (b)(4.2%)** | **Closed-End Investment Company (b)(4.2%)** | **Closed-End Investment Company (b)(4.2%)** | **Closed-End Investment Company (b)(4.2%)** | **Closed-End Investment Company (b)(4.2%)** | **Closed-End Investment Company (b)(4.2%)** |
| 600 | Nuveen California Quality Municipal Income Fund, <br>CA, VRDP Series 4 (AMT) (c) *(Cost $600,000)* | 3.73 | 01/06/23 | 08/03/43 |  | 600000 |

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See Notes to Financial Statements<br>11

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Portfolio of Investments** ◼ **December 31, 2022** *continued*

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **PRINCIPAL<br>AMOUNT<br>(000)** | **<br>**  | **COUPON<br>RATE** | **YIELD TO<br>MATURITY<br>ON DATE OF<br>PURCHASE** | **MATURITY<br>DATE (a)** | **VALUE** |
| | **U.S. Agency Security (1.4%)** | **U.S. Agency Security (1.4%)** | **U.S. Agency Security (1.4%)** | **U.S. Agency Security (1.4%)** | **U.S. Agency Security (1.4%)** |
| $200 | Federal Home Loan Bank (d) *(Cost $199,506)* | 0.00% | 4.05% | 01/25/23 | $199506 |
|  | **Total Investments** *(Cost $14,149,506) (e)* |  |  | 99.9% | 14149506 |
|  | **Other Assets in Excess of Liabilities** |  |  | 0.1 | 20358 |
|  | **Net Assets** |  |  | 100.0% | $14169864 |

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&nbsp;&nbsp;&nbsp;&nbsp;*AMT Alternative Minimum Tax.*

&nbsp;&nbsp;&nbsp;&nbsp;*VRDP Variable Rate Demand Preferred.*

&nbsp;&nbsp;&nbsp;&nbsp;*(a) Date on which the principal amount can be recovered through demand.*

&nbsp;&nbsp;&nbsp;&nbsp;*(b) Floating or variable rate securities: The rates disclosed are as of December 31, 2022. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.*

&nbsp;&nbsp;&nbsp;&nbsp;*(c) 144A security - Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.*

&nbsp;&nbsp;&nbsp;&nbsp;*(d) Purchased on a discount basis. The interest rates shown have been adjusted to reflect a money market equivalent yield.*

&nbsp;&nbsp;&nbsp;&nbsp;*(e) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.*

See Notes to Financial Statements<br>12

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Financial Statements**

**Statement of Assets and Liabilities** *December 31, 2022*

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| | |
|:---|:---|
| **Assets:** | **Assets:** |
| Investments in securities, at value (cost $14,149,506) | $14149506 |
| Cash | 48018 |
| Receivable for: | Receivable for: |
| Interest | 30836 |
| Due from Adviser | 27035 |
| Prepaid expenses and other assets | 33264 |
| **Total Assets** | 14288659 |
| **Liabilities:** | **Liabilities:** |
| Payable for: | Payable for: |
| Trustees' fees | 38862 |
| Transfer agent fees | 1407 |
| Shares of beneficial interest redeemed | 527 |
| Accrued expenses and other payables | 77999 |
| **Total Liabilities** | 118795 |
| **Net Assets** | $14169864 |
| **Composition of Net Assets:** | **Composition of Net Assets:** |
| Paid-in-Capital | $14211338 |
| Total Accumulated Loss | (41474) |
| **Net Assets** | $14169864 |
| **R Class Shares:** | **R Class Shares:** |
| Net Assets | $7615399 |
| Shares Outstanding *(unlimited shares authorized, $0.01 par value)* | 7613657 |
| **Net Asset Value Per Share** | $1.00 |
| **S Class Shares:** | **S Class Shares:** |
| Net Assets | $6554465 |
| Shares Outstanding *(unlimited shares authorized, $0.01 par value)* | 6554439 |
| **Net Asset Value Per Share** | $1.00 |

---

See Notes to Financial Statements<br>13

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Financial Statements** *continued*

**Statement of Operations** *For the year ended December 31, 2022*

---

| | |
|:---|:---|
| **Net Investment Income:** | **Net Investment Income:** |
| **Interest Income** | $179391 |
| **Expenses** | **Expenses** |
| Professional fees | 182863 |
| Registration fees | 40332 |
| Advisory fee (Note 3) | 32547 |
| Shareholder services fee (Note 4) | 21699 |
| Shareholder reports and notices | 19595 |
| Administration fee (Note 3) | 10849 |
| Transfer agent fees (Note 5) | 9189 |
| Trustees' fees and expenses | 8221 |
| Custodian fees(Note 6) | 6094 |
| Other | 20921 |
| **Total Expenses** | 352310 |
| Less: expenses waived/reimbursed (Note 3 & 4) | (314292) |
| **Net Expenses** | 38018 |
| **Net Investment Income** | 141373 |
| **Net Increase in Net Assets Resulting from Operations** | $141373 |

---

See Notes to Financial Statements<br>14

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Financial Statements** *continued*

**Statements of Changes in Net Assets**

---

| | | |
|:---|:---|:---|
| | **FOR THE YEAR<br>ENDED<br>DECEMBER 31, 2022** | **FOR THE YEAR<br>ENDED<br>DECEMBER 31, 2021** |
| **Increase (Decrease) in Net Assets:<br>Operations:** | **Increase (Decrease) in Net Assets:<br>Operations:** | **Increase (Decrease) in Net Assets:<br>Operations:** |
| Net investment income | $141373 | $3013 |
| **Net Increase** | 141373 | 3013 |
| **Dividends to Shareholders from:** | **Dividends to Shareholders from:** | **Dividends to Shareholders from:** |
| Net investment income | Net investment income | Net investment income |
| R Class shares | (79107) | (2406) |
| S Class shares | (62266) | (607) |
| **Total Dividends** | (141373) | (3013) |
| Net decrease from transactions in shares of beneficial interest | (16057545) | (385980) |
| **Net Decrease** | (16057545) | (385980) |
| **Net Assets:** | **Net Assets:** | **Net Assets:** |
| Beginning of period | 30227409 | 30613389 |
| **End of Period** | $14169864 | $30227409 |

---

See Notes to Financial Statements<br>15

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022**

**1. Organization and Accounting Policies**

Morgan Stanley California Tax-Free Daily Income Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund applies investment company accounting and reporting guidance Accounting Standards Codification ("ASC") Topic 946. The Fund's investment objective is to seek to provide as high a level of daily income exempt from federal and California income tax as is consistent with stability of principal and liquidity. The Fund was organized as a Massachusetts business trust on April 25, 1988 and commenced operations on July 22, 1988.

The Fund offers two classes of shares, R Class and S Class Shares. The two classes have the same fees and expenses.

The Securities and Exchange Commission ("SEC") has adopted changes to the rules that govern money market funds. The Fund operates as a "retail money market fund," which allows the Fund to continue to seek a stable net asset value ("NAV"). The Fund will be permitted to impose a liquidity fee on redemptions from the Fund or temporarily restrict redemptions from the Fund for up to 10 business days.

The following is a summary of significant accounting policies:

**A. Valuation of Investments —** Portfolio securities are valued at amortized cost, which approximates fair value, in accordance with Rule 2a-7 under the Act. The amortized cost of an instrument is determined by valuing it at its original cost and thereafter amortizing any discount or premium from its face value at a constant rate until maturity. Investments in mutual funds are valued at the NAV as of the close of each business day.

**B. Accounting for Investments —** Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities and are included in interest income. Interest income is accrued daily as earned.

**C. Multiple Class Allocations —** Investment income, expenses and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Shareholder services fees are charged directly to the respective class.

**D. Dividends and Distributions to Shareholders —** Dividends and distributions to shareholders are recorded on the close of each business day. Dividends from net investment income, if any, are declared and paid daily. Net realized capital gains, if any, are distributed at least annually.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

**E. Use of Estimates —** The preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

**F. Indemnifications —** The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

**2. Fair Valuation Measurements**

Financial Accounting Standards Board ("FASB") ASC 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the price that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs); and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below:

• Level 1 — unadjusted quoted prices in active markets for identical investments

• Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

The following is a summary of the inputs used to value the Fund's investments as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **INVESTMENT TYPE** | **LEVEL 1<br>UNADJUSTED<br>QUOTED<br>PRICES** | **LEVEL 2<br>OTHER<br>SIGNIFICANT<br>OBSERVABLE<br>INPUTS** | **LEVEL 3<br>SIGNIFICANT<br>UNOBSERVABLE<br>INPUTS** | **TOTAL** |
| **Assets:** | **Assets:** | **Assets:** | **Assets:** | **Assets:** |
| **Weekly Variable Rate Bonds** | $— | $7800000 | $— | $7800000 |
| **Daily Variable Rate Bonds** |  | 3650000 |  | 3650000 |
| **Commercial Paper** |  | 1900000 |  | 1900000 |
| **Closed-End Investment Company** |  | 600000 |  | 600000 |
| **U.S. Agency Security** |  | 199506 |  | 199506 |
| **Total Assets** | $**—** | $**14149506** | $**—** | $**14149506** |

---

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

**3. Advisory/Administration Agreements**

Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Management Inc. (the "Adviser"), the Fund pays an advisory fee, accrued daily and paid monthly, by applying the annual rate of 0.15% to the average daily net assets of the Fund determined as of the close of each business day.

The Adviser also serves as the Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.05% of the Fund's average daily net assets.

Under a Sub-Administration Agreement between the Administrator and State Street Bank and Trust Company ("State Street"), State Street provides certain administrative services to the Fund. For such services, the Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

The Adviser/Administrator has agreed to assume all operating expenses of the Fund and to waive the advisory fee and administration fee, as applicable, to the extent that such expenses and fees excluding certain investment related expenses, taxes, interest and other extraordinary expenses (including litigation), on an annualized basis exceeds 0.60% of the average daily net assets of the Fund. The fee waivers and/or expense reimbursements will continue for at least one year from the date of the Fund's prospectus or until such time that the Fund's Board of Trustees (the "Trustees") acts to discontinue all or a portion of such waivers and/or expense reimbursements when they deem such action is appropriate.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

In addition, the Adviser and Administrator have also agreed to waive all or a portion of the Fund's advisory fee and administration fee, respectively, and/or reimburse expenses, to the extent that total expense exceed total income of the Fund on a daily basis. The Adviser and Administrator may make additional voluntary fee waivers and/or expense reimbursements. The ratios of expenses to average net assets disclosed in the Fund's Financial Highlights may be lower than the maximum expense cap of 0.60% due to these additional fee waivers and/or expense reimbursements. The Adviser and Administrator may discontinue these voluntary fee waivers and/or expense reimbursements at any time in the future. For the year ended December 31, 2022, the Adviser waived $32,547 and the Administrator waived $10,849. For the same period, the Adviser reimbursed additional expenses in the amount of $249,197.

**4. Shareholder Services Plan**

Pursuant to a Shareholder Services Plan (the "Plan"), the Fund may pay Morgan Stanley Distribution, Inc. (the "Distributor"), an affiliate of the Adviser/Administrator, as compensation for the provision of services to shareholders a service fee up to the rate of 0.15% on an annualized basis of the average daily net assets of the Fund for R Class and S Class shares.

Reimbursements for these expenses are made in monthly payments by the Fund to the Distributor, which will in no event exceed an amount equal to a payment at the annual rate of 0.15% of the Fund's average daily net assets during the month. Expenses incurred by the Distributor pursuant to the Plan in any fiscal year will not be reimbursed by the Fund through payments accrued in any subsequent fiscal year. For the year ended December 31, 2022, the distribution fee was accrued at the annual rate of 0.10%. Effective October 10, 2018, the Distributor has agreed to waive all of the Fund's shareholder services fee. For the year ended December 31, 2022, the Distributor waived $21,699. The fee waivers will continue for at least one year from the date of the Fund's prospectus or until such time that the Fund's Trustees act to discontinue all or a portion of such waivers when they deem such action is appropriate.

The Distributor has agreed to waive all or a portion of the Fund's shareholder services fee and/or reimburse expenses, to the extent that total expenses exceed total income of the Fund on a daily basis. The Distributor may discontinue this voluntary fee waivers and/or expense reimbursements at any time in the future. This arrangement had no effect during the most recent reporting period.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

**5. Dividend Disbursing and Transfer/Co-Transfer Agent**

The Fund's dividend disbursing and transfer agent is SS&C Global Investor & Distribution Solutions, Inc. ("SS&C GIDS, Inc."). Pursuant to a Transfer Agency Agreement, the Fund pays SS&C GIDS, Inc. a fee based on the number of classes, accounts and transactions relating to the Fund.

Eaton Vance Management ("EVM"), an affiliate of Morgan Stanley, provides co-transfer agency and related services to the Fund pursuant to a Co-Transfer Agency Services Agreement. For the year ended December 31, 2022, EVM earned $0 for providing such services.

**6. Custodian Fees**

State Street (the "Custodian") also serves as Custodian for the Fund in accordance with a Custodian Agreement. The Custodian holds cash, securities and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

**7. Transactions with Affiliates**

The Fund is permitted to purchase and sell securities ("cross-trade") from and to other Morgan Stanley funds as well as other funds and client accounts for which the Adviser or an affiliate of the Adviser serves as investment adviser, pursuant to procedures approved by the Trustees in compliance with Rule 17a-7 under the Act (the "Rule"). Each cross-trade is executed at the current market price in compliance with provisions of the Rule. For the year ended December 31, 2022, the Fund did not engage in any cross-trade transactions.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. The Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003. The Fund did not have pension costs for the year ended December 31, 2022. At December 31, 2022, the Fund had an accrued pension liability of $38,862, which is reflected as "Trustees' fees" in the Statement of Assets and Liabilities.

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Trustee to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

**8. Shares of Beneficial Interest**

Transactions in shares of beneficial interest, at $1.00 per share, were as follows:

---

| | | |
|:---|:---|:---|
| | **FOR THE YEAR<br>ENDED<br>DECEMBER 31, 2022** | **FOR THE YEAR<br>ENDED<br>DECEMBER 31, 2021** |
| **R CLASS SHARES** | **R CLASS SHARES** | **R CLASS SHARES** |
| Shares sold | 772406 | 1 |
| Shares issued in reinvestment of dividends | 79105 | 2406 |
| Shares redeemed | (17081167) | (358723) |
| Net decrease — R Class | (16229656) | (356316) |
| **S CLASS SHARES** | **S CLASS SHARES** | **S CLASS SHARES** |
| Shares sold | 7856333 | 3107041 |
| Shares issued in reinvestment of dividends | 60440 | 607 |
| Shares redeemed | (7744662) | (3137312) |
| Net increase (decrease) — S Class | 172111 | (29664) |
| Net decrease in Fund | (16057545) | (385980) |

---

**9. Federal Income Tax Status**

It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable and tax-exempt income. Accordingly, no provision for federal income taxes is required in the financial statements.

FASB ASC 740-10, "Income Taxes — Overall"*,* sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Generally, each of the tax years in the four-year period ended December 31, 2022 remains subject to examination by taxing authorities.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2022 and 2021 was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **2022 DISTRIBUTIONS PAID FROM:** | **2022 DISTRIBUTIONS PAID FROM:** | **2021 DISTRIBUTIONS PAID FROM:** | **2021 DISTRIBUTIONS PAID FROM:** |
| **TAX-EXEMPT<br>INCOME** | **PAID-IN-<br>CAPITAL** | **TAX-EXEMPT<br>INCOME** | **PAID-IN- <br>CAPITAL** |
| $141373 | $— | $1323 | $1689 |

---

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, due to distributions in excess of current earnings, resulted in the following reclassifications among the components of net assets at December 31, 2022:

---

| | |
|:---|:---|
| **TOTAL <br>ACCUMULATED<br>LOSS** | **PAID-IN-<br>CAPITAL** |
| $2478 | $(2478) |

---

At December 31, 2022, the Fund had no distributable earnings on a tax basis.

**10. Other**

At December 31, 2022, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 99.6%.

**11. Market Risk**

Social, political, economic and other conditions and events, such as war, natural disasters, health emergencies (e.g., epidemics and pandemics), terrorism, conflicts, social unrest, recessions, inflation, rapid interest rate changes and supply chain disruptions, may occur and could significantly impact issuers, industries, governments and other systems, including the financial markets. It is difficult to predict when events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects (which may last for extended periods). These events

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Notes to Financial Statements** ◼ **December 31, 2022** *continued*

may negatively impact broad segments of businesses and populations and have a significant and rapid negative impact on the performance of the Fund's investments and exacerbate pre-existing risks to the Fund. For example, coronavirus ("COVID-19") and associated recovery responses could adversely impact the operations of the Fund and its service providers and financial performance of the Fund and the Fund's investments. The extent of such impact depends on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, (iv) government and regulatory responses, and (v) the effects on the economy overall as a result of developments such as disruption to consumer demand, economic output and supply chains. The duration and extent of COVID-19 and associated economic and market conditions and uncertainty over the long term cannot be reasonably estimated at this time. The ultimate impact of COVID-19 and the extent to which the associated conditions impact the Fund will also depend on future developments, which are highly uncertain, difficult to accurately predict and subject to change at any time. The financial performance of the Fund's investments (and, in turn, the Fund's investment results) may be adversely affected because of these and similar types of factors and developments.

**12. Results of Special Meeting of Shareholders (unaudited)**

On February 25, 2022, a special meeting of the Fund's shareholders was held for the purpose of voting on the following matter, the results of which were as follows:

Election of Trustees by all shareholders:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **FOR** | **FOR** | **AGAINST** | **AGAINST** |
| Frances L. Cashman |  | 29,225,957 |  | 867,517 |
| Nancy C. Everett |  | 29,225,957 |  | 867,517 |
| Eddie A. Grier |  | 29,225,957 |  | 867,517 |
| Jakki L. Haussler |  | 29,225,957 |  | 867,517 |
| Patricia A. Maleski |  | 29,225,957 |  | 867,517 |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Financial Highlights**

Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** |
| | **2022** | **2021** | **2020** | **2019** | **2018** |
| **R Class Shares** | **R Class Shares** | **R Class Shares** | **R Class Shares** | **R Class Shares** | **R Class Shares** |
| **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** |
| Net asset value, beginning of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Net income from investment operations | 0.008 | 0.000<br><sup>(1)</sup> | 0.003 | 0.011 | 0.008 |
| Less dividends and distributions from net <br>investment income | (0.008) | (0.000)<sup>(1)</sup> | (0.003) | (0.011) | (0.008)<sup>(2)</sup> |
| Net asset value, end of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| **Total Return** | 0.79% | 0.01% | 0.34% | 1.08% | 0.76% |
| **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** |
| Net expenses | 0.18%<sup>(3)</sup> | 0.05%<sup>(3)</sup> | 0.14%<sup>(3)</sup> | 0.20%<sup>(3)</sup> | 0.51%<sup>(3)</sup> |
| Net investment income | 0.64%<sup>(3)</sup> | 0.01%<sup>(3)</sup> | 0.37%<sup>(3)</sup> | 1.08%<sup>(3)</sup> | 0.75%<sup>(3)</sup> |
| **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** |
| Net assets, end of period, in millions | $8 | $24 | $24 | $25 | $27 |

---

*(1) Amount is less than $0.001.*

*(2) Includes capital gain and paid-in-capital distributions of less than $0.001.*

*(3) If the Fund had borne all of its expenses that were reimbursed or waived by the Distributor and/or Adviser/Administrator, the annualized expense and net investment income (loss) ratios would have been as follows:*

---

| | | |
|:---|:---|:---|
| *PERIOD ENDED* | *EXPENSE<br>RATIO* | *NET INVESTMENT<br>INCOME (LOSS) RATIO* |
| *December 31, 2022* | *1.62%* | *(0.80*<br>*)%* |
| *December 31, 2021* | *1.17* | *(1.11*<br>*)* |
| *December 31, 2020* | *1.01* | *(0.50*<br>*)* |
| *December 31, 2019* | *0.85* | *0.43* |
| *December 31, 2018* | *0.96* | *0.30* |

---

See Notes to Financial Statements<br>24

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Financial Highlights** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** | **FOR THE YEAR ENDED DECEMBER 31,** |
| | **2022** | **2021** | **2020** | **2019** | **2018** |
| **S Class Shares** | **S Class Shares** | **S Class Shares** | **S Class Shares** | **S Class Shares** | **S Class Shares** |
| **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** | **Selected Per Share Data:** |
| Net asset value, beginning of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Net income from investment operations | 0.008 | 0.000<br><sup>(1)</sup> | 0.003 | 0.011 | 0.008 |
| Less dividends and distributions from net <br>investment income | (0.008) | (0.000)<sup>(1)</sup> | (0.003) | (0.011) | (0.008)<sup>(2)</sup> |
| Net asset value, end of period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| **Total Return** | 0.79% | 0.01% | 0.34% | 1.08% | 0.76% |
| **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** | **Ratios to Average Net Assets:** |
| Net expenses | 0.18%<sup>(3)</sup> | 0.05%<sup>(3)</sup> | 0.14%<sup>(3)</sup> | 0.20%<sup>(3)</sup> | 0.51%<sup>(3)</sup> |
| Net investment income | 0.64%<sup>(3)</sup> | 0.01%<sup>(3)</sup> | 0.37%<sup>(3)</sup> | 1.08%<sup>(3)</sup> | 0.75%<sup>(3)</sup> |
| **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** | **Supplemental Data:** |
| Net assets, end of period, in thousands | $6554 | $6382 | $6412 | $14519 | $6378 |

---

*(1) Amount is less than $0.001.*

*(2) Includes capital gain and paid-in-capital distributions of less than $0.001.*

*(3) If the Fund had borne all of its expenses that were reimbursed or waived by the Distributor and/or Adviser/Administrator, the annualized expense and net investment income (loss) ratios would have been as follows:*

---

| | | |
|:---|:---|:---|
| *PERIOD ENDED* | *EXPENSE<br>RATIO* | *NET INVESTMENT<br>INCOME (LOSS) RATIO* |
| *December 31, 2022* | *1.62%* | *(0.80*<br>*)%* |
| *December 31, 2021* | *1.17* | *(1.11*<br>*)* |
| *December 31, 2020* | *1.01* | *(0.50*<br>*)* |
| *December 31, 2019* | *0.85* | *0.43* |
| *December 31, 2018* | *0.96* | *0.30* |

---

See Notes to Financial Statements<br>25

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Report of Independent Registered Public Accounting Firm**

**To the Shareholders and Board of Trustees of<br>Morgan Stanley California Tax-Free Daily Income Trust:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Morgan Stanley California Tax-Free Daily Income Trust (the "Fund"), including the portfolio of investments, as of December 31, 2022, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at December 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian, brokers and others; when replies were not received from brokers and others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](j2316542_ga003.jpg)

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.

Boston, Massachusetts<br>February 28, 2023

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**U.S. Customer Privacy Notice (unaudited)** April 2021

---

| | |
|:---|:---|
| **FACTS** | **WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br>◼ Social Security number and income<br>◼ investment experience and risk tolerance<br>◼ checking account number and wire transfer instructions |
| **How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing. |

---

---

| | | |
|:---|:---|:---|
| **Reasons we can share your personal information** | **Does MSIM share?** | **Can you limit this sharing?** |
| **For our everyday business purposes —**<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes —**<br> to offer our products and services to you | Yes | No |
| **For joint marketing with other financial companies** | No | We don't share |
| **For our investment management affiliates'<br>everyday business purposes —**<br> information about your transactions, experiences, and creditworthiness | Yes | Yes |
| **For our affiliates' everyday business purposes —** <br> information about your transactions and experiences | Yes | No |
| **For our affiliates' everyday business purposes —**<br> information about your creditworthiness | No | We don't share |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**U.S. Customer Privacy Notice (unaudited)** *continued* April 2021

---

| | | |
|:---|:---|:---|
| **Reasons we can share your personal information** | **Does MSIM share?** | **Can you limit this sharing?** |
| **For our investment management affiliates to market to you** | Yes | Yes |
| **For our affiliates to market to you** | No | We don't share |
| **For non-affiliates to market to you** | No | We don't share |

---

---

| | |
|:---|:---|
| **To limit our sharing** | Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com<br>**Please note:**<br> If you are a *new* customer, we can begin sharing your information 30 days from the date we sent this notice. When you are *no longer* our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing. |
| **Questions?** | Call toll-free (844) 312-6327 or email: imprivacyinquiries@morganstanley.com |

---

**Who we are**

---

| | |
|:---|:---|
| **Who is providing this notice?** | Morgan Stanley Investment Management Inc. and its investment management affiliates ("MSIM") (*see* Investment Management Affiliates definition below) |

---

**What we do**

---

| | |
|:---|:---|
| **How does MSIM protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
| **How does MSIM collect my personal information?** | We collect your personal information, for example, when you<br>◼ open an account or make deposits or withdrawals from your account<br>◼ buy securities from us or make a wire transfer<br>◼ give us your contact information<br>We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**U.S. Customer Privacy Notice (unaudited)** *continued* April 2021

**What we do**

---

| | |
|:---|:---|
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br>◼ sharing for affiliates' everyday business purposes — information about your creditworthiness<br>◼ affiliates from using your information to market to you<br>◼ sharing for non-affiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law. |

---

**Definitions**

---

| | |
|:---|:---|
| **Investment Management Affiliates** | MSIM Investment Management Affiliates include registered investment advisers, registered broker/dealers, and registered and unregistered funds in the Investment Management Division. Investment Management Affiliates does not include entities associated with Morgan Stanley Wealth Management, such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. |
| **Affiliates** | Companies related by common ownership or control. They can be financial and non-financial companies.<br>◼ *Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co.* |
| **Non-affiliates** | Companies not related by common ownership or control. They can be financial and non-financial companies.<br>◼ *MSIM does not share with non-affiliates so they can market to you.* |
| **Joint marketing** | A formal agreement between non-affiliated financial companies that together market financial products or services to you.<br>◼ *MSIM doesn't jointly market* |

---

**Other important information**

**Vermont:** Except as permitted by law, we will not share personal information we collect about Vermont residents with Non-affiliates unless you provide us with your written consent to share such information.

**California:** Except as permitted by law, we will not share personal information we collect about California residents with Non-affiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us.

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)**

**Independent Trustees:**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Frank L. Bowman <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1944 | Trustee | Since August 2006 | President, Strategic Decisions, LLC (consulting) (since February 2009); Director or Trustee of various Morgan Stanley Funds (since August 2006); Chairperson of the Compliance and Insurance Committee (since October 2015); formerly, Chairperson of the Insurance Sub-Committee of the Compliance and Insurance Committee (2007-2015); served as President and Chief Executive Officer of the Nuclear Energy Institute (policy organization) (February 2005-November 2008); retired as Admiral, U.S. Navy after serving over 38 years on active duty including 8 years as Director of the Naval Nuclear Propulsion Program in the Department of the Navy and the U.S. Department of Energy (1996-2004); served as Chief of Naval Personnel (July 1994-September 1996) and on the Joint Staff as Director of Political Military Affairs (June 1992-July 1994); knighted as Honorary Knight Commander of the Most Excellent Order of the British Empire; awarded the Officier de l'Orde National du Mèrite by the French Government; elected to the National Academy of Engineering (2009). | 85 | Director of Naval and Nuclear Technologies LLP; Director Emeritus of the Armed Services YMCA; Member of the National Security Advisory Council of the Center for U.S. Global Engagement and a former member of the CNA Military Advisory Board; Chairman of Fairhaven United Methodist Church Board of Trustees; Member of the Board of Advisors of the Dolphin Scholarship Foundation; Director of other various nonprofit organizations; formerly, Director of BP, plc (November 2010-May 2019). |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Frances L. Cashman <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1961 | Trustee | Trustee since February 2022 | Chief Executive Officer, Asset Management Division, Director or Trustee of various Morgan Stanley Funds (since February 2022); Delinian Ltd. (financial information) (May 2021-Present); Executive Vice President and various other roles, Legg Mason & Co. (asset management) (2010-2020); Managing Director, Stifel Nicolaus (2005-2010). | 86 | Trustee and Investment Committee Member, GeorgiaTech Foundation (since June 2019); Trustee and Chair of Marketing Committee, Member of Investment Committee, Loyola Blakefield (Since September 2017); Trustee, MMI Gateway Foundation (since September 2017); Director and Investment Committee Member, Catholic Community Foundation Board (2012-2018); Director and Investment Committee Member, St. Ignatius Loyola Academy (2011-2017). |
| Kathleen A. Dennis <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1953 | Trustee | Since August 2006 | Chairperson of the Governance Committee (since January 2021), Chairperson of the Liquidity and Alternatives Sub-Committee of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since August 2006); President, Cedarwood Associates (mutual fund and investment management consulting) (since July 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006). | 85 | Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Funds Directors Forum (2014-present); Director of various non-profit organizations. |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Nancy C. Everett <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1955 | Trustee | Since January 2015 | Chairperson of the Equity Investment Committee (since January 2021); Director or Trustee of various Morgan Stanley Funds (since January 2015); Chief Executive Officer, Virginia Commonwealth University Investment Company (since November 2015); Owner, OBIR, LLC (institutional investment management consulting) (since June 2014); formerly, Managing Director, BlackRock, Inc. (February 2011-December 2013) and Chief Executive Officer, General Motors Asset Management (a/k/a Promark Global Advisors, Inc.) (June 2005-May 2010). | 86 | Formerly, Member of Virginia Commonwealth University School of Business Foundation (2005-2016); Member of Virginia Commonwealth University Board of Visitors (2013-2015); Member of Committee on Directors for Emerging Markets Growth Fund, Inc. (2007-2010); Chairperson of Performance Equity Management, LLC (2006-2010); and Chairperson, GMAM Absolute Return Strategies Fund, LLC (2006-2010). |
| Eddie A. Grier <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1955 | Trustee | Trustee since February 2022 | Dean, Santa Clara University Leavey School of Business (since July 2021); Director or Trustee of various Morgan Stanley Funds (since February 2022); Dean, Virginia Commonwealth University School of Business (2010-2021); President and various other roles, Walt Disney Company (entertainment and media) (1981-2010). | 86 | Director, Witt/Keiffer, Inc. (executive search) (since 2016); Director, NuStar GP, LLC (energy) (since August 2021); Director, Sonida Senior Living, Inc. (residential community operator) (2016-2021); Director, NVR, Inc. (homebuilding) (2013-2020); Director, Middleburg Trust Company (wealth management) (2014-2019); Director, Colonial Williamsburg Company (2012-2021); Regent, University of Massachusetts Global (since 2021); Director and Chair, ChildFund International (2012-2021); Trustee, Brandman University (2010-2021); Director, Richmond Forum (2012-2019). |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Jakki L. Haussler <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1957 | Trustee | Since January 2015 | Chairperson of the Audit Committee (January 2023), Director or Trustee of various Morgan Stanley Funds (since January 2015); Chairman, Opus Capital Group (since 1996); formerly, Chief Executive Officer, Opus Capital Group (1996-2019); Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP (July 1999-December 2010); Director, The Victory Funds (February 2005-July 2008). | 86 | Director, Vertiv Holdings Co. (VRT) (August 2022); Director, Barnes Group Inc. (since July 2021); Director of Cincinnati Bell Inc. and Member, Audit Committee and Chairman, Governance and Nominating Committee (2008-2021); Director of Service Corporation International and Member, Audit Committee and Investment Committee; Director of Northern Kentucky University Foundation and Member, Investment Committee; Member of Chase College of Law Center for Law and Entrepreneurship; Director of Best Transport (2005-2019); Director of Chase College of Law Board of Visitors; formerly, Member, University of Cincinnati Foundation Investment Committee; Member, Miami University Board of Visitors (2008-2011); Trustee of Victory Funds (2005-2008) and Chairman, Investment Committee (2007-2008) and Member, Service Provider Committee (2005-2008). |
| Dr. Manuel H. Johnson <br>c/o Johnson Smick International, Inc. <br>220 I Street, NE <br>Suite 200 <br>Washington, D.C. 20002 <br>Birth Year: 1949 | Trustee | Since July 1991 | Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Fixed Income, Liquidity and Alternatives Investment Committee (since January 2021), Chairperson of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006); Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury. | 85 | Director of NVR, Inc. (home construction). |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Joseph J. Kearns <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1942 | Trustee | Since August 1994 | Senior Adviser, Kearns & Associates LLC (investment consulting); Chairperson of the Audit Committee of various Morgan Stanley Funds (August 1994-December 2022), Director or Trustee of various Morgan Stanley Funds (since August 1994); formerly, Deputy Chairperson of the Audit Committee (July 2003-September 2006); CFO of the J. Paul Getty Trust (1982-1999). | 86 | Director, Rubicon Investments (since February 2019); Prior to August 2016, Director of Electro Rent Corporation (equipment leasing); Prior to December 31, 2013, Director of The Ford Family Foundation. |
| Michael F. Klein <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1958 | Trustee | Since August 2006 | Chairperson of the Risk Committee (since January 2021); Managing Director, Aetos Alternatives Management, LP (since March 2000); Co-President, Aetos Alternatives Management, LP (since January 2004) and Co-Chief Executive Officer of Aetos Alternatives Management, LP (since August 2013); Chairperson of the Fixed Income Sub-Committee of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management and President, various Morgan Stanley Funds (June 1998-March 2000); Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999). | 85 | Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals). |

---

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Independent Trustee** | **Position(s) <br>Held with<br>Registrant** | **Length of<br>Time Served\*** | **Principal Occupation(s) <br>During Past 5 Years <br>and Other Relevant<br>Professional Experience** | **Number of <br>Funds<br>in Fund <br>Complex<br>Overseen by <br>Independent<br>Trustee\*\*** | **Other Directorships <br>Held by Independent Trustee <br>During Past 5 Years\*\*\*** |
| Patricia A. Maleski <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1960 | Trustee | Since January 2017 | Director or Trustee of various Morgan Stanley Funds (since January 2017); Managing Director, JPMorgan Asset Management (2004-2016); Oversight and Control Head of Fiduciary and Conflicts of Interest Program (2015-2016); Chief Control Officer — Global Asset Management (2013-2015); President, JPMorgan Funds (2010-2013); Chief Administrative Officer (2004-2013); various other positions including Treasurer and Board Liaison (since 2001). | 86 | Trustee (since January 2022) and Treasurer (since January 2023), Nutley Family Service Bureau, Inc. |
| W. Allen Reed <br>c/o Perkins Coie LLP <br>Counsel to the Independent Trustees <br>1155 Avenue of the Americas <br>22nd Floor <br>New York, NY 10036 <br>Birth Year: 1947 | Chair of the Board and Trustee | Chair of the Board since August 2020 and Trustee since August 2006 | Chair of the Boards of various Morgan Stanley Funds (since August 2020); Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Vice Chair of the Boards of various Morgan Stanley Funds (January 2020-August 2020); President and Chief Executive Officer of General Motors Asset Management; Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994-December 2005). | 85 | Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015). |

---

  *\* This is the earliest date the Trustee began serving the Morgan Stanley Funds. Each Trustee serves an indefinite term, until his or her successor is elected.*

  *\*\* The Fund Complex includes (as of December 31, 2022) all open-end and closed-end funds (including all of their portfolios) advised by Morgan Stanley Investment Management Inc. (the "Adviser") and any funds that have an adviser that is an affiliated person of the Adviser (including, but not limited to, Morgan Stanley AIP GP LP).*

  *\*\*\* This includes any directorships at public companies and registered investment companies held by the Trustee at any time during the past five years.*

------

**Morgan Stanley California Tax-Free Daily Income Trust**

**Trustee and Officer Information (unaudited)** *continued*

**Executive Officers:**

---

| | | | |
|:---|:---|:---|:---|
| **Name, Address and Birth Year of<br>Executive Officer** | **Position(s)<br>Held with<br>Registrant** | **<br>Length of<br>Time Served\*** | **<br>Principal Occupation(s) During Past 5 Years** |
| John H. Gernon <br>522 Fifth Avenue <br>New York, NY 10036 <br>Birth Year: 1963 | President and Principal Executive Officer | Since September <br>2013 | President and Principal Executive Officer of the Equity and Fixed Income Funds and the Morgan Stanley AIP Funds (since September 2013) and the Liquidity Funds and various money market funds (since May 2014) in the Fund Complex; Managing Director of the Adviser. |
| Deidre A. Downes <br>1633 Broadway <br>New York, NY 10019 <br>Birth Year: 1977 | Chief Compliance Officer | Since November 2021 | Executive Director of the Adviser (since January 2021) and Chief Compliance Officer of various Morgan Stanley Funds (since November 2021). Formerly, Vice President and Corporate Counsel at PGIM and Prudential Financial (October 2016-December 2020). |
| Francis J. Smith <br>522 Fifth Avenue <br>New York, NY 10036 <br>Birth Year: 1965 | Treasurer and Principal Financial Officer | Treasurer since July 2003 and Principal Financial Officer since September 2002 | Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002). |
| Mary E. Mullin <br>1633 Broadway <br>New York, NY 10019 <br>Birth Year: 1967 | Secretary | Since June 1999 | Managing Director of the Adviser; Secretary of various Morgan Stanley Funds (since June 1999). |
| Michael J. Key <br>522 Fifth Avenue <br>New York, NY 10036 <br>Birth Year: 1979 | Vice President | Since June 2017 | Vice President of the Equity and Fixed Income Funds, Liquidity Funds, various money market funds and the Morgan Stanley AIP Funds in the Fund Complex (since June 2017); Managing Director of the Adviser; Head of Product Development for Equity and Fixed Income Funds (since August 2013). |

---

*The Fund's statement of additional information includes further information about the Fund's Trustees and Officers, and is available without charge by visiting www.morganstanley.com/im/moneymarketfundsshareholderreports or upon request by calling 1 (800) 869-6397.*

  *\* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves an indefinite term, until his or her successor is elected.*

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**Morgan Stanley California Tax-Free Daily Income Trust**

**Federal Tax Notice (unaudited)**

For federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund during its taxable year ended December 31, 2022.

The Fund designated 100.00% of its income dividends as tax-exempt income dividends.

In January, the Fund provides tax information to shareholders for the preceding calendar year.

------

**Adviser and Administrator**

Morgan Stanley Investment Management Inc.<br>522 Fifth Avenue<br>New York, New York 10036

**Distributor**

Morgan Stanley Distribution, Inc.<br>522 Fifth Avenue<br>New York, New York 10036

**Transfer Agent**

SS&C Global Investor & Distribution Solutions, Inc.<br>2000 Crown Colony Drive<br>Quincy, Massachusetts 02169

**Co-Transfer Agent**

Eaton Vance Management<br>Two International Place<br>Boston, Massachusetts 02110

**Custodian**

State Street Bank and Trust Company<br>One Lincoln Street<br>Boston, Massachusetts 02111

**Legal Counsel**

Dechert LLP<br>1095 Avenue of the Americas<br>New York, New York 10036

**Counsel to the Independent Trustees**

Perkins Coie LLP<br>1155 Avenue of the Americas,<br>22nd Floor<br>New York, New York 10036

**Independent Registered Public Accounting Firm**

Ernst & Young LLP<br>200 Clarendon Street<br>Boston, Massachusetts 02116

This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its Trustees. It is available, without charge, by calling 1 (800) 869-6397.

This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Please read the Prospectus carefully before investing.

Morgan Stanley Distribution, Inc., member FINRA.© 2023 Morgan Stanley

![](j2316542_za004.jpg)

DSCANN<br>5452887 EXP 02.29.24

------

Item 2. Code of Ethics.

(a) The registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

(b) No information need be disclosed pursuant to this paragraph.

(c) Not applicable.

(d) Not applicable.

(e) Not applicable.

(f) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The registrant's Code of Ethics is attached hereto as Exhibit 13 A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Not applicable.

Item 3. Audit Committee Financial Expert.

The registrant's Board of Trustees has determined that Jakki L. Haussler, an "independent" Trustee, is an "audit committee financial expert" serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services.

(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:

**2022**

---

| | | |
|:---|:---|:---|
|  | **Registrant** | **Covered Entities<sup>(1)</sup>** |
| **Audit Fees** | $37527 | N/A |
| **Non-Audit Fees** |  |  |
| &nbsp;&nbsp;&nbsp;**Audit-Related Fees** | $—<sup>(2)</sup> | $—<sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;**Tax Fees** | $—<sup>(3)</sup> | $—<sup>(4)</sup> |
| &nbsp;&nbsp;&nbsp;**All Other Fees** | $— | $5778872<sup>(5)</sup> |
| **Total Non-Audit Fees** | $— | $5778872 |
| **Total** | $37527 | $5778872 |

---

**2021**

---

| | | |
|:---|:---|:---|
|  | **Registrant** | **Covered Entities<sup>(1)</sup>** |
| **Audit Fees** | $35403 | N/A |
| **Non-Audit Fees** |  |  |
| &nbsp;&nbsp;&nbsp;**Audit-Related Fees** | $—<sup>(2)</sup> | $—<sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;**Tax Fees** | $—<sup>(3)</sup> | $26678468<sup>(4)</sup> |
| &nbsp;&nbsp;&nbsp;**All Other Fees** | $— | $—<sup>(5)</sup> |
| **Total Non-Audit Fees** | $— | $26678468 |
| **Total** | $35403 | $26678468 |

---

N/A- Not applicable, as not required by Item 4.

<sup>(1)</sup> Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant.

<sup>(2)</sup> Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities' and funds advised by the Adviser or its affiliates, specifically data verification and agreed-upon procedures related to asset securitizations and agreed-upon procedures engagements.

<sup>(3)</sup> Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the preparation and review of the Registrant's tax returns.

<sup>(4)</sup> Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the review of Covered Entities' tax returns.

<sup>(5)</sup> The fees included under "All Other Fees" are for services provided by Ernst & Young LLP related to surprise examinations for certain investment accounts to satisfy SEC Custody Rules and consulting services related to merger integration for sister entity to the Adviser.

(e)(1) The audit committee's pre-approval policies and procedures are as follows:

**AUDIT COMMITTEE**

**AUDIT AND NON-AUDIT SERVICES**

**PRE-APPROVAL POLICY AND PROCEDURES**

**OF THE**

**MORGAN STANLEY FUNDS**

**AS ADOPTED AND AMENDED JULY 23, 2004 AND JUNE 12 AND 13, 2019<sup>3</sup>**

**1.** **Statement of Principles** 

The Audit Committee of the Board is required to review and, in its sole discretion, pre-approve all Covered Services to be provided by the Independent Auditors to the Fund and Covered Entities in order to assure that services performed by the Independent Auditors do not impair the auditor's independence from the Fund.

The SEC has issued rules specifying the types of services that an independent auditor may not provide to its audit client, as well as the audit committee's administration of the engagement of the independent auditor. The SEC's rules establish two different approaches to pre-approving services, which the SEC considers to be equally valid. Proposed services either: may be pre-approved without consideration of specific case-by-case services by the Audit Committee ("<u>general pre-approval</u>"); or require the specific pre-approval of the Audit Committee or its delegate ("<u>specific pre-approval</u>"). The Audit Committee believes that the combination of these two approaches in this Policy will result in an effective and efficient procedure to pre-approve services performed by the Independent Auditors. As set forth in this Policy, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee (or by any member of the Audit Committee to which pre-approval authority has been delegated) if it is to be provided by the Independent Auditors. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval by the Audit Committee.

The appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers and provides a different period and states otherwise. The Audit Committee will annually review and pre-approve the services that may be provided by the Independent Auditors without obtaining specific pre-approval from the Audit Committee. The Audit Committee will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

The purpose of this Policy is to set forth the policy and procedures by which the Audit Committee intends to fulfill its responsibilities. It does not delegate the Audit Committee's responsibilities to pre-approve services performed by the Independent Auditors to management.

<sup>3</sup> This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and Procedures (the "<u>Policy</u>"), adopted as of the date above, supersedes and replaces all prior versions that may have been adopted from time to time.

The Fund's Independent Auditors have reviewed this Policy and believes that implementation of the Policy will not adversely affect the Independent Auditors' independence.

**2.** **Delegation** 

As provided in the Act and the SEC's rules, the Audit Committee may delegate either type of pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

**3.** **Audit Services** 

The annual Audit services engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit and other procedures required to be performed by the Independent Auditors to be able to form an opinion on the Fund's financial statements. These other procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of internal control, and consultations relating to the audit. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Fund structure or other items.

In addition to the annual Audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other Audit services, which are those services that only the Independent Auditors reasonably can provide. Other Audit services may include statutory audits and services associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

The Audit Committee has pre-approved the Audit services in Appendix A. All other Audit services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

**4.** **Audit-related Services** 

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Fund's financial statements and, to the extent they are Covered Services, the Covered Entities or that are traditionally performed by the Independent Auditors. Because the Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor and is consistent with the SEC's rules on auditor independence, the Audit Committee may grant general pre-approval to Audit-related services. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as "Audit services"; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Forms N-CEN and/or N-CSR.

The Audit Committee has pre-approved the Audit-related services in Appendix A. All other Audit-related services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

**5.** **Tax Services** 

The Audit Committee believes that the Independent Auditors can provide Tax services to the Fund and, to the extent they are Covered Services, the Covered Entities, such as tax compliance, tax planning and tax advice without impairing the auditor's independence, and the SEC has stated that the Independent Auditors may provide such services.

Pursuant to the preceding paragraph, the Audit Committee has pre-approved the Tax Services in Appendix A. All Tax services in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

**6.** **All Other Services** 

The Audit Committee believes, based on the SEC's rules prohibiting the Independent Auditors from providing specific non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, would not impair the independence of the auditor and are consistent with the SEC's rules on auditor independence.

The Audit Committee has pre-approved the All Other services in Appendix A. Permissible All Other services not listed in Appendix A must be specifically pre-approved by the Audit Committee (or by any member of the Audit Committee to which pre-approval has been delegated).

**7.** **Pre-Approval Fee Levels or Budgeted Amounts** 

Pre-approval fee levels or budgeted amounts for all services to be provided by the Independent Auditors will be established annually by the Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services.

**8.** **Procedures** 

All requests or applications for services to be provided by the Independent Auditors that do not require specific approval by the Audit Committee will be submitted to the Fund's Principal Financial and Accounting Officer and must include a detailed description of the services to be rendered. The Fund's Principal Financial and Accounting Officer will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the Independent Auditors. Requests or applications to provide services that require specific approval by the Audit Committee or Chairperson of the Audit Committee will be submitted to the Audit Committee by the Fund's Principal Financial and Accounting Officer, who, after consultation with the Independent Auditors, will discuss whether the request or application is consistent with the SEC's rules on auditor independence.

The Audit Committee has designated the Fund's Principal Financial and Accounting Officer to monitor the performance of all services provided by the Independent Auditors and to determine whether such services are in compliance with this Policy. The Fund's Principal Financial and Accounting Officer will report to the Audit Committee on a periodic basis on the results of its monitoring. Both the Fund's Principal Financial and Accounting Officer and management will immediately report to the Chairperson of the Audit Committee any breach of this Policy that comes to the attention of the Fund's Principal Financial and Accounting Officer or any member of management.

**9.** **Additional Requirements** 

The Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the Independent Auditors and to assure the auditor's independence from the Fund, such as reviewing a formal written statement from the Independent Auditors delineating all relationships between the Independent Auditors and the Fund, consistent with the PCAOB's Ethics and Independence Rule 3526, and discussing with the Independent Auditors its methods and procedures for ensuring independence.

**10.** **Covered Entities** 

Covered Entities include the Fund's investment adviser(s) and any entity controlling, controlled by or under common control with the Fund's investment adviser(s) that provides ongoing services to the Fund(s). Beginning with non-audit service contracts entered into on or after May 6, 2003, the Fund's audit committee must pre-approve non-audit services provided not only to the Fund but also to the Covered Entities if the engagements relate directly to the operations and financial reporting of the Fund. This list of Covered Entities would include:

<u>Morgan Stanley Funds</u>

Morgan Stanley & Co. LLC

Morgan Stanley Investment Management Inc.

Morgan Stanley Investment Management Limited

Morgan Stanley Investment Management Private Limited

Morgan Stanley Asset & Investment Trust Management Co., Limited

Morgan Stanley Investment Management Company

Morgan Stanley Services Company, Inc.

Morgan Stanley Distribution, Inc.

Morgan Stanley AIP GP LP

Morgan Stanley Alternative Investment Partners LP

Morgan Stanley Smith Barney LLC

Morgan Stanley Capital Management LLC

Morgan Stanley Asia Limited

Morgan Stanley Services Group

(e)(2) Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to Covered Entities to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Registrant. 100% of such services were pre-approved by the audit committee pursuant to the Audit Committee's pre-approval policies and procedures (attached hereto).

(f) Not applicable.

(g) See table above.

(h) The audit committee of the Board of Trustees has considered whether the provision of services other than audit services performed by the auditors to the Registrant and Covered Entities is compatible with maintaining the auditors' independence in performing audit services.

**APPENDIX A**

**Pre-Approved Audit Services**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Service** | &nbsp;&nbsp;**Range of Fees** | &nbsp;&nbsp;**Range of Fees** |
|  | &nbsp;&nbsp;**The Fund(s)** | &nbsp;&nbsp;**Covered <br> Entities** |
| &nbsp;&nbsp;Statutory audits or financial audits for the Funds | &nbsp;&nbsp;For a complete list of fees, please contact the legal department <br>\*\* | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;Services associated with SEC registration statements (including new fund filings/seed audits), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end fund offerings, consents), and assistance in responding to SEC comment letters | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Consultations by the Fund's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies (Note: Under SEC rules, some consultations may be "audit related" services rather than "audit" services) | &nbsp;&nbsp;\* | &nbsp;&nbsp; \* |

---

**Pre-Approved Audit-Related Services**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Service** | &nbsp;&nbsp;**Range of Fees** | &nbsp;&nbsp;**Range of Fees** |
|  | &nbsp;&nbsp;**The Fund(s)** | &nbsp;&nbsp;**Covered<br> Entities** |
| &nbsp;&nbsp;Attest procedures not required by statute or regulation | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Due diligence services pertaining to potential fund mergers | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Consultations by the Fund's management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be "audit" services rather than "audit-related" services) | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;General assistance with implementation of the requirements of SEC rules or listing standards promulgated pursuant to the Sarbanes-Oxley Act | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |

---

**Pre-Approved Tax Services**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Service** | &nbsp;&nbsp;**Range of Fees** | &nbsp;&nbsp;**Range of Fees** |
|  | &nbsp;&nbsp;**The Fund(s)** | &nbsp;&nbsp;**Covered<br> Entities** |
| &nbsp;&nbsp;U.S. federal, state and local tax planning and advice | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;U.S. federal, state and local tax compliance | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;International tax planning and advice | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;International tax compliance | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Review/preparation of federal, state, local and international income, franchise, and other tax returns | &nbsp;&nbsp;$450,000 PwC | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;Identification of Passive Foreign Investment Companies | &nbsp;&nbsp;$175,000 PwC | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;PwC ITV Tool – assist in determining which Fund holdings have foreign capital gains tax exposure | &nbsp;&nbsp;$125,000 PwC | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Foreign Tax Services - Preparation of local foreign tax returns and assistance with local tax compliance issues (including maintenance of transaction schedules, assistance in periodic tax remittances, tax registration, representing funds before foreign revenue authorities and assistance with assessment orders) | &nbsp;&nbsp;$500,000 PwC | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Assistance with tax audits and appeals before the IRS and similar state, local and foreign agencies | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |
| &nbsp;&nbsp;Tax advice and assistance regarding statutory, regulatory or administrative developments (e.g., excise tax reviews, evaluation of Fund's tax compliance function) | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |

---

**Pre-Approved All Other Services**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Service** | &nbsp;&nbsp;**Range of Fees** | &nbsp;&nbsp;**Range of Fees** |
|  | &nbsp;&nbsp;**The Fund(s)** | &nbsp;&nbsp;**Covered<br> Entities** |
| &nbsp;&nbsp;Risk management advisory services, e.g., assessment and testing of security infrastructure controls | &nbsp;&nbsp;\* | &nbsp;&nbsp;\* |

---

\*Aggregate fees related to the pre-approved services will be limited to 10% of the 2022/2023 annual fees for audit and tax services (see fee schedule distributed by the Auditors).

\*\* Audit and tax services for new funds/portfolios will be subject to the maximum audit and tax fee for a fund/portfolio on fee schedule distributed by the Auditors.

**Prohibited Non-Audit Services**

● Bookkeeping or other services related to the accounting records or financial statements of the audit client

● Financial information systems design and implementation

● Appraisal or valuation services, fairness opinions or contribution-in-kind reports

● Actuarial services

● Internal audit outsourcing services

● Management functions

● Human resources

● Broker-dealer, investment adviser or investment banking services

● Legal services

● Expert services unrelated to the audit

(i) Not Applicable.

(j) Not Applicable.

Item 5. Audit Committee of Listed Registrants.

(a) The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:

Joseph J. Kearns, Nancy C. Everett, Eddie A. Grier and Jakki L. Haussler.

(b) Not applicable.

Item 6. Schedule of Investments

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Applicable only to reports filed by closed-end funds.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

Applicable only to reports filed by closed-end funds.

Item 10. Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund's Board of Trustees since the Fund last provided disclosure in response to this item.

Item 11. Controls and Procedures

(a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed End Management Investment Companies.

Not Applicable

Item 13. Exhibits

[(a) The Code of Ethics for Principal Executive and Senior Financial Officers.](tm231654d1_ex99-codeeth.htm)

[(b) A separate certification for each principal executive officer and principal financial officer of the registrant as part of EX-99.CERT.](tm231654d1_ex99-cert.htm)

[(c) Section 906 Certification](tm231654d1_ex99-906cert.htm)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| |
|:---|
| Morgan Stanley California Tax-Free Daily Income Trust |
| /s/ John H. Gernon |
| John H. Gernon |
| Principal Executive Officer |
| February 16, 2023 |

---

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| |
|:---|
| /s/ John H. Gernon |
| John H. Gernon |
| Principal Executive Officer |
| February 16, 2023 |

---

---

| |
|:---|
| /s/ Francis J. Smith |
| Francis J. Smith |
| Principal Financial Officer |
| February 16, 2023 |

---

## Ex-99.Code

**Exhibit 99.CODE ETH**

**EXHIBIT 13 a**

**<u>CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS<br> adopted SEPTEMBER 28, 2004, As AMended September 20, 2005, december 1, 2006, January 1, 2008 , SEPTEMBER 25, 2008 and april 23, 2009 And March 18, 2010</u>**

**I.** This Code of Ethics (the "Code") for the investment companies within the Morgan Stanley complex
identified in Exhibit A (collectively, "Funds" and each, a "Fund") applies to each Fund's Principal
Executive Officer, President, Principal Financial Officer and Treasurer (or persons performing similar functions) ("Covered Officers"
each of whom are set forth in Exhibit B) for the purpose of promoting:

● honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

● full, fair, accurate, timely and understandable disclosure in reports and documents that a company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund;

● compliance with applicable laws and governmental rules and regulations;

● prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

● accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. Any question about the application of the Code should be referred to the General Counsel or his/her designee (who is set forth in Exhibit C).

**II.** **Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest** 

***Overview***. A "conflict of interest" occurs when a Covered Officer's private interest interferes, or appears to interfere, with the interests of, or his service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" (as defined in the Investment Company Act) of the Fund. The Fund's and its investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside the parameters of this Code, unless or until the General Counsel determines that any violation of such programs and procedures is also a violation of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Fund and its investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund or for the investment adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the Fund and its investment adviser. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors/Trustees ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund.

Each Covered Officer must not:

● use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally (directly or indirectly);

● cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; or

● use material non-public knowledge of portfolio transactions made or contemplated for, or actions proposed to be taken by, the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions.

Each Covered Officer must, at the time of signing this Code, report to the General Counsel all affiliations or significant business relationships outside the Morgan Stanley complex and must update the report annually.

Conflict of interest situations should always be approved by the General Counsel and communicated to the relevant Fund or Fund's Board. Any activity or relationship that would present such a conflict for a Covered Officer would likely also present a conflict for the Covered Officer if an immediate member of the Covered Officer's family living in the same household engages in such an activity or has such a relationship. Examples of these include:

● service or significant business relationships as a director on the board of any public or private company;

● accepting directly or indirectly, anything of value, including gifts and gratuities in excess of $100 per year from any person or entity with which the Fund has current or prospective business dealings, not including occasional meals or tickets for theatre or sporting events or other similar entertainment; provided it is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

● any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than its investment adviser, principal underwriter, or any affiliated person thereof; and

● a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership.

**III.** **Disclosure and Compliance** 

● Each Covered Officer should familiarize himself/herself with the disclosure and compliance requirements generally applicable to the Funds;

● each Covered Officer must not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's Directors/Trustees and auditors, or to governmental regulators and self-regulatory organizations;

● each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and their investment advisers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and

● it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

**IV.** **Reporting and Accountability** 

Each Covered Officer must:

● upon adoption of the Code (thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Boards that he has received, read and understands the Code;

● annually thereafter affirm to the Boards that he has complied with the requirements of the Code;

● not retaliate against any other Covered Officer, other officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and

● notify the General Counsel promptly if he/she knows or suspects of any violation of this Code. Failure to do so is itself a violation of this Code.

The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any waivers<sup>1</sup> sought by a Covered Officer must be considered by the Board of the relevant Fund or Funds.

The Funds will follow these procedures in investigating and enforcing this Code:

● the General Counsel will take all appropriate action to investigate any potential violations reported to him;

● if, after such investigation, the General Counsel believes that no violation has occurred, the General Counsel is not required to take any further action;

● any matter that the General Counsel believes is a violation will be reported to the relevant Fund's Audit Committee;

<sup>1</sup> Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of a material departure from a provision of the code of ethics."

● if the directors/trustees/managing general partners who are not "interested persons" as defined by the Investment Company Act (the "Independent Directors/Trustees/Managing General Partners") of the relevant Fund concur that a violation has occurred, they will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer or other appropriate disciplinary actions;

● the Independent Directors/Trustees/Managing General Partners of the relevant Fund will be responsible for granting waivers of this Code, as appropriate; and

● any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

**V.** **Other Policies and Procedures** 

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds' investment advisers, principal underwriters, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code unless any provision of this Code conflicts with any applicable federal or state law, in which case the requirements of such law will govern. The Funds' and their investment advisers' and principal underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act and Morgan Stanley's Code of Ethics are separate requirements applying to the Covered Officers and others, and are not part of this Code.

**VI.** **Amendments** 

Any amendments to this Code, other than amendments to Exhibits A, B or C, must be approved or ratified by a majority vote of the Board of each Fund, including a majority of Independent Directors/Trustees/Managing General Partners.

**VII.** **Confidentiality** 

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Independent Directors/Trustees/Managing General Partners of the relevant Fund or Funds and their counsel, the relevant Fund or Funds and their counsel and the relevant investment adviser and its counsel.

**VIII.** **Internal Use** 

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion

I have read and understand the terms of the above Code. I recognize the responsibilities and obligations incurred by me as a result of my being subject to the Code. I hereby agree to abide by the above Code.

_________________________

Date:_____________________

<u>EXHIBIT A</u>

**MORGAN STANLEY FUNDS**

at

**December 31, 2022**

For a current list of the Morgan Stanley Funds, please contact the Legal Department.

**<u>EXHIBIT B</u>**

**<u>Equity and Fixed Income Funds</u>**

**<u>Money Market Funds</u>**

**<u>Covered Officers</u>**

John H. Gernon –President and Principal Executive Officer

Francis J. Smith – Principal Financial Officer and Treasurer

**<u>EXHIBIT C</u>**

**<u>General Counsel's Designee - Chief Legal Officer</u>**

**Mary E. Mullin**

## Ex-99.Cert

**Exhibit 99.CERT**

**EXHIBIT 13 B1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**<u>CERTIFICATIONS</u>**

I, John H. Gernon, certify that:

1. I have reviewed this report on Form N-CSR of Morgan Stanley California Tax-Free Daily Income Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report
based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and

5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of
the registrant's board of trustees (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information;
and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal controls over financial reporting.

Date: February 16, 2023

---

| |
|:---|
| /s/ John H. Gernon |
| John H. Gernon |
| Principal Executive Officer |

---

**EXHIBIT 13 B2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**<u>CERTIFICATIONS</u>**

I, Francis J. Smith, certify that:

1. I have reviewed this report on Form N-CSR of Morgan Stanley California Tax-Free Daily Income Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report
based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and

5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of
the registrant's board of trustees (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information;
and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal controls over financial reporting.

Date: February 16, 2023

---

| |
|:---|
| /s/ Francis J. Smith |
| Francis J. Smith |
| Principal Financial Officer |

---

## Exhibit 99.906

**Exhibit 99.906 CERT**

EXHIBIT 13 C1

**SECTION 906 CERTIFICATION**

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley California Tax-Free Daily Income Trust

In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2022 that is accompanied by this certification, the undersigned hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Issuer.

---

| | |
|:---|:---|
| Date: February 16, 2023 | /s/ John H. Gernon |
|  | John H. Gernon |
|  | Principal Executive Officer |

---

A signed original of this written statement required by Section 906 has been provided to Morgan Stanley California Tax-Free Daily Income Trust and will be retained by Morgan Stanley California Tax-Free Daily Income Trust and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 13 C2

**SECTION 906 CERTIFICATION**

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley California Tax-Free Daily Income Trust

In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended December 31, 2022 that is accompanied by this certification, the undersigned hereby certifies that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Issuer.

---

| | |
|:---|:---|
| Date: February 16, 2023 | /s/ Francis J. Smith |
|  | Francis J. Smith |
|  | Principal Financial Officer |

---

A signed original of this written statement required by Section 906 has been provided to Morgan Stanley California Tax-Free Daily Income Trust and will be retained by Morgan Stanley California Tax-Free Daily Income Trust and furnished to the Securities and Exchange Commission or its staff upon request.