Thanks for your reply @LindaS5247 . However, I am referring to "Accrued Interest Paid on Purchases".
When purchasing a bond in the secondary market (not new issue), as the buyer, you pay the seller the accrued interest from the last payment date through the purchase date. The seller has collected his interest from you for the partial period he held the bond. On the next interest payment date, you will get the full interest payment for the period from the issuer of the bond though you did not hold the bond the entire period. The net amount between what you collected from the issuer on the payment date and the Accrued Interest you paid the seller results in the interest you earned for the partial amount of time you held the bond during that period.
Now, when the broker reports the 1099-INT information, Box 1 contains the full amount of interest you were paid from the issuer. Because you paid the seller the Accrued Interest, the full interest amount needs to be adjusted (lower) by that amount. TurboTax provides for that, as I described in my original post. In the 1099-INT details, TurboTax provides a screen to enter the adjustment amount, and to indicate is was for Accrued Interest Paid on Purchase that is included in the Box 1 amount.
The issue is not between taxable and tax exempt interest as it applies to the state. It is TurboTax's handling of the Accrued Interest adjustment amount when there is information in Box 11/13.
See the Feb 22, 2023 reply on this thread from @MarilynG1 :
https://ttlc.intuit.com/community/taxes/discussion/how-to-report-accrued-interest-paid-on-bonds-purc...
