State flags were often used by southern units, because the confederacy did not have enough money or time to make Confederacy flags. 

 

On July 3, 1963, the 28th Infantry's flag was captured by the 1st Minnosota Volunteer Infantry during Pickett's charge at Gettysburg.

 

Today, the flag is on display at a musuem in Minnesota.  In a very controversial debate, Virginia continusously asked for their flag to be returned.  Minnesota continues to refuse to give the flag up, despite a 1905 Congressional Resolution that states that flags captured in battle should be returned to their orignating states.  Minnesota rebuffs all requests, stating that "The flag does not tell a one-sided story,’’ said Ian Stewart, the organization’s deputy director. ‘‘This artifact is important to Minnesota and should stay where it is."

 

The reason the flag is such a hot debate, is because the number of casualties was so high for both sides.  Gettysburg (where the flag was captured) was the turning point of the war. 

 

The following is a link to a video from the caretaker at the Minnesota Museum where the flag is currently kept: