Since etp is a publicly traded partnership. interest and dividend income allocated to a state which starts from federal cannot be offset by operating losses from the same partnership. So, you can end up with a tiny amount of interest and dividend allocated to a foreign state (foreign meaning not your home state). So, technically, you can be required to file a foreign state tax return and even owe a buck or two in tax, for which your home state will allow a credit.
Since the amounts are so small I ignore the states. If one or more sends me a letter saying I owe 3 dollars in tax, I would send them the 3 dollars because that's cheaper than trying to comply, especially for those paying for tax preparation.
I was under the impression that "portfolio income" dividends and interest are not directly earned in these states but simply apportioned out. In other words they are not saying these items were earned in the amounts listed in these states. My understanding only the passive income/losses and adding back of bonus depreciation if a individual state does not allow are the only items to consider for state income. I agree with your comments on every other point.
Surprisingly, as I found out today, many states require a filing...some require filing even though the income is nominal. However, since investors don't file, and the amounts are small, the states don't have the resources to enforce the taxes. We are all tax scofflaws.
boz - Did you not read arbtrdr's post below? We are not tax scoffaws! ETP reported negative state income in every state on my K-1. Are you suggesting one needs to file a return even though they have no taxable income? Seriously!
Did you read you K-1? Do you have taxable income allocated to ANY of the states? Do you pay taxes or file returns when you have no income in that state?
Second, when and if you eventually sell your income is generated in the state where you live. If you own shares of GE and sell you do not need to pay taxes in 50 states, 10 provinces of Canada and 178 other countries. You only pay to the state and IRS unless you are subject ot some sort of local tax where you live.