Treasury interest is taxed federally but not by the state.
That is correct. Line 10 on my state return "Interest earned from Treasuries and when it is populated, it becomes be a reduction to my interest income. It should have automatically come over from my Federal Return. Without that, I'm being taxed on all interest including the Treasury interest.
interest from US Treasury notes and bills are not taxed by states, (though some assets held by US Treasury such as REPO are taxed by states--details would be provided on a 1099-DIV)
Yeah, but in this case, we are talking about box 3 on a 1099-INT.
(hopefully @1yellowdrill doesn't also have $$ in box 12 that equals box 3, and is thus negating all of box 3)