“It is common for states to calculate their tax bill based on your total AGI and then take a percentage of that based on the percentage earned in state. IIRC, Arizona does it too. It is probably the most common way to calculate non-resident state taxes.”
They do it on the pretense that it is “tax simplification”.
They use a common factor, the federal adjusted income. The simplification pretense is since the adjustments have already been done, they don’t have to have their own rules and formulas for those adjustments, and you don’t need to go through that individual state’s steps for taking those adjustments. That’s a lie.
They KNOW what it does is it lumps all your income, regardless of state of origin together. They know that merely making the income ratio between their state and the federal total can wind up effectively taxing income from another state that would not be taxed, if their state tax rate was simply applied to an “adjusted state income” for their state - as my remarks pointed out.
It is based on the idea that a progressive tax system is good. If a millionaire makes 5% of his income in state X, why should the state collect the same tax they would on someone who made 50K in that state?
It isn’t simplification so much as a way to tax someone based on their total ability to pay. It is completely reasonable - assuming a “progressive” tax system rather than a flat tax system.