In your reply to the e-mail below, Residency and interest, you state: “Any state with an income tax will tax the interest on ‘out-of-state’ bonds. Naturally, states without income taxes don’t tax bond interest of any kind.” Your answer is not entirely accurate. New Hampshire doesn’t have a personal income tax, but it does tax the interest earned on municipal bonds from other states (but not on New Hampshire muni bonds). This may hold true for other states that do not tax earned income but do levy a tax on residents who earn interest from out-of-state muni bonds.
P.C., Massachusetts