I disagree. Massachusetts allows Backdoor Roth like most (all?) states. Your money has already been taxed.
Even what you shared explains it: "...if the distribution exceeds the amount of IRA contributions that were previously subject to tax.". This money was taxed before putting it in the traditional IRA (definition of a backdoor Roth) so it should not be taxed again.
Not the ultimate source of course, but as an additional datapoint Google overview just confirmed our woes:
Avoiding Double Taxation: To ensure the conversion isn't taxed again by the state, you must manually indicate on your state return that the money was previously taxed by Massachusetts.
On Schedule X (Other Income), you typically use a worksheet for "Taxable IRA/Keogh Plan and Roth IRA Conversion Distributions".
You must enter the amount of your original contribution in the field for "Total contributions previously taxed by Massachusetts" to offset the distribution.
