Because a startup is likely to have greater local costs than local sales and so wouldn't pay any taxes. When you start a company, you have many local costs (wa

Because a startup is likely to have greater local costs than local sales and so wouldn't pay any taxes. When you start a company, you have many local costs (wages, rent, utilities) and yet you haven't made any sales. In the tech sector, when you do make sales they are likely to be at least in part overseas. Therefore, it will be a while before you then have to pay any tax. When you get big enough that your local sales become larger than your local costs, then you will probably be able to afford the extra tax as you are now benefiting from the infrastructure provided by the state.