I wonder when people say this sort of thing how much time they spend on tax compliance. I have a company in the UK and one in Australia, and man, it is a MINEFIELD. Very little of what one knows translates very well, as each country has its own quirks.

The USA is like that on STEROIDS. You can have 3 levels of income tax. that's insane! I can't image the costs of being complaint with that - not least of which is the cost of making an accidental mistake. I doubt many small businesses want to be experts in {INSERT STATE HERE}'s tax regulations and laws. Far easier to avoid the headache if at all possible.

And if you don't think that is the case, imagine instead of states it was countries. How much does a US company want to deal with Haitian laws?