diff --git a/jax/_src/lax/control_flow/loops.py b/jax/_src/lax/control_flow/loops.py
index 823d7c7e2..f57a857ec 100644
--- a/jax/_src/lax/control_flow/loops.py
+++ b/jax/_src/lax/control_flow/loops.py
@@ -1049,8 +1049,8 @@ def _scan_pp_rule(eqn, context, settings):
     del printed_params['reverse']
   return core._pp_eqn(eqn.replace(params=printed_params), context, settings)
 
-def _scan_discharge_rule(in_avals, out_avals, *args, jaxpr, num_consts,
-                         num_carry, linear, unroll, reverse, length):
+def _scan_state_discharge_rule(in_avals, out_avals, *args, jaxpr, num_consts,
+                               num_carry, linear, unroll, reverse, length):
   jaxpr, consts = jaxpr.jaxpr, jaxpr.consts
   if consts: raise NotImplementedError
   consts, carry, xs = split_list(args, [num_consts, num_carry])
@@ -1129,7 +1129,7 @@ core.custom_typechecks[scan_p] = partial(_scan_typecheck, False)
 pe.partial_eval_jaxpr_custom_rules[scan_p] = _scan_partial_eval_custom
 pe.padding_rules[scan_p] = _scan_padding_rule
 pe.dce_rules[scan_p] = _scan_dce_rule
-state_discharge.register_discharge_rule(scan_p)(_scan_discharge_rule)
+state_discharge.register_discharge_rule(scan_p)(_scan_state_discharge_rule)
 # TODO(mattjj,frostig): un-comment this pp rule
 # core.pp_eqn_rules[scan_p] = _scan_pp_rule
 
diff --git a/tests/state_test.py b/tests/state_test.py
index e964b1d5f..b52bea429 100644
--- a/tests/state_test.py
+++ b/tests/state_test.py
@@ -1205,6 +1205,37 @@ class StateControlFlowTest(jtu.JaxTestCase):
     self.assertAllClose(jax.jit(f)(0, 1, 5, zs), (35, 11))
     self.assertAllClose(jax.jit(f)(1, 1, 2, zs), (21, 11))
 
+  def test_scan_with_state_in_body_nested(self):
+    @run_state
+    def g(refs):
+      a_ref, x_ref, w_ref, y_ref, zs_ref = refs
+
+      def f(x, w, y, zs):
+        @run_state
+        def loop(refs):
+          x_ref, w_ref = refs
+          def body(y, z):
+            x_ref[...] += y
+            w_ref[...] += z
+            a_ref[...] += z
+            return y + 1, ()
+          lax.scan(body, y, zs)
+        a_ref[...] += 1
+        out = loop((x, w))
+        a_ref[...] += 1
+        return out
+
+      x, w = f(x_ref[...], w_ref[...], y_ref[...], zs_ref[...])
+      x_ref[...] = x
+      w_ref[...] = w
+
+    zs = jnp.arange(5)
+    jaxpr = jax.make_jaxpr(g)((1, 0, 1, 5, zs)).jaxpr
+    self.assertEmpty(jaxpr.effects)
+    self.assertAllClose(jax.jit(g)((1, 0, 1, 5, zs))[:3], (13, 35, 11))
+    self.assertAllClose(jax.jit(g)((1, 1, 1, 2, zs))[:3], (13, 21, 11))
+
+
 class GeneralRefTest(jtu.JaxTestCase):
 
   def test_unshaped_ref(self):