I appreciate the feedback, and I see that the instructions give a list of sources for Box 3, but is this an exhaustive or exemplary list? As the IRS instructions do not carry the force of law, can any one link to the 26 USC or appropriate CFR entry to specifically define what goes into the box labeled "US Savings Bonds or Treasury Obligations" (Box 3)? Note that the IRS issued 1099-INT does NOT indicate a box number, just the Recipient ID number, the tax year, and the Total Interest Paid, no box numbers are provided (if the IRS had reported this amount in an area labeled "Box 1," I wouldn't be asking the question, but since they've left it to the taxpayer to assign the amount to a box, and the amount is undeniably gov't paid interest on an obligation of the treasury, I'm seeking a specific tax reg as to what qualifies for Box 3 treatment).
Put differently, the question is; is interest on US bonds exempt from state taxes due to some specific carve out for those specific instruments, or is that interest exempt from state taxes due to a general exemption for US Gov't paid interest? And can anyone point to the code or regs to support one answer or the other?
