The problem is most people are not operating their businesses in Nevada. They operate in their home states and thereby have to register as foreign corporations. To understand this further, you must first understand a couple of principles. The first term you must understand is nexus. A business is subject to tax in a certain jurisdiction only if the taxpayer has established nexus there.
Nexus is a measure of the extent of business contact that the taxpayer has established in the state.
Once the taxpayer has established sufficient nexus, it is taxable in the state. Sufficient nexus for income tax purposes is normally established when a corporation derives income from sources within the state, owns or leases property in the state, employs personnel in the state or has capital or property in the state. However, the amount of activity or connection which is necessary to create nexus is defined by state statute and, consequently, tends to vary from state to state. Public Law 86-272 was enacted by Congress as a political compromise on multistate corporate taxable income. Historically, the passage of Public Law No. 86-272 marked the first time that Congress enacted general legislation to limit a state's right to impose an income tax on interstate activities.