Interest income exempt in NJ

My broker reported in 1099-INT taxable interest in Box 1 and US Treasury interest in Box 3.  For Federal purposes, TurboTax adds them together.  For NJ purposes, TurboTax is putting both amounts as Tax Exempt Interest.  I think this is wrong. Only the Box 3 amount should be tax exempt.  The Box 1 amount should be taxable.  Does anyone else have this issue?