An OID bond is not the same as a coupon bond. Treasury Bills, for example are OID. They pay no coupon interest payments. Treasury Notes and Bonds are not OID, they do pay coupon interest payments. The difference between the price of a primary original issue discount (OID) Treasury security and the maturity value is always treated as interest that is exempt from state income tax and will be reported on a 1099-INT just like the coupon interest from a Treasury Note or Bond. But a Note is not OID so the OID rules do not apply to it.
