I just called a broker and asked him about this tax issue regarding MLPs. He said yes, it is true that one typically has to pay state income taxes in multiple states on earnings that such companies do business in. I asked if this was also true when one makes such investments from tax deferred IRA accounts. He said that he is less sure of the answer, but he thought it was still true. He added that, as a matter of personal experience, such companies are sometimes slow about mailing a form that investors get to complete their taxes, with the form arriving in some cases days after the deadline for fining one's taxes. I'm going to stay out of these investments. The interest rates are nice, but not worth the hassel to me.
Some of the stocks that this fund invests in are MLPs, Master Limited Partnerships. Many of these are natural gas pipeline companies that operate in many states that their lines cross through. I heard that such investments require that one pay income taxes on earnings in each state that such companies operate in. I've been unwilling to invest in these funds for that reason. Does anyone know if this is true?