When one or more members of a partnership are non-residents of the state where the partnership was based, special tax rules apply. 

States are prohibited from taxing the retirement income paid by a partnership to a non-resident retired partner under any written plan, program, or arrangement in effect immediately before retirement begins. Certain adjustments to retirement payments under pension or deferred compensation plans, including cost-of-living adjustments, do not disqualify such plans under the "substantially equal periodic payments" test.  (Sec. 114(b)(1)(I))