[storborg]

That's because California has tax-hungry laws concerning what defines a "nexus" (a business's presence in the state). It's difficult for many companies to avoid creating a California presence, so they're stuck collecting California sales tax as if they were based there.

[Vivtek]

Doesn't every state have similar laws? Indiana does - yet I don't normally pay sales tax online, because most of the companies aren't based in Indiana, whereas online companies really do tend to be in California.

[storborg]

Lots of states, but not every state. California is also of particular importance because it's so big: nobody would care as much if Delaware had laws like this.

However, in California, even if you only have a physical presence in some remote part of northern CA, suddenly that affects your ability to sell to 37 million other people.

[3am]

I have firsthand experience in online retail and if California is 'tax hungry' for that reason, then every other state in the country is, also. If you have payroll in a state, you collect sales taxes for physical items shipping there.