California, Colorado, and Oklahoma have laws or legislative proposals to capture income and impose sales tax collection obligations on out-of-state online companies. These tax laws presume that a retailer is doing business in a state merely because it is a part of a controlled group of corporations, where some business in the group is engaged some kind of business in that state.
But these “component nexus” proposals will be a huge barrier for an online business who’s accepted investment capital from a larger company that also has other business interests in multiple states.
What’s wrong? Privacy legislation that sets information collection defaults will harm the growth of online commerce.
