No, you're right, they're the shell companies designed to avoid asking customers to pay CA sales tax. Virtual presence is fun until it means you have to start c

No, you're right, they're the shell companies designed to avoid asking customers to pay CA sales tax. Virtual presence is fun until it means you have to start competing on a level playing field. The affiliate program might be the strongest legal argument for in-state presence, but it's far from the only one. Apart from the subsidiaries, there's also the more than $3 billion they get from CA residents. I think everyone here should have to disclose competing interests on this topic: full disclosure: I work for a company (part time) that makes most of its money from Amazon affiliate revenue (but I personally am not taking Amazon's threats very seriously).