As the old saying goes, what happens in California is usually what happens in the nation. According to U.S. Census Bureau data, California local governments outpaced their counterparts in other states in tax collections during the 1980s and early 1990s. Even with Proposition 13 in place, local revenues grew significantly faster than economic growth and markedly faster than local government revenues in other states. Utility taxes, of particular concern to electronic commerce, grew 167 percent faster than in other states. But it bears repeating because so many still don't comprehend the implications of this medium on tax policy.
Taxation is a decidedly local event.
Some activity or some benefit must be local to the jurisdiction before a taxable event is triggered. With the Internet, there is no concept of location. There is no here or there. Consequently, local government tax policies can have far-reaching implications. The burdens of a single jurisdiction's action can have far-reaching consequences.