>That is interstate commerce, and therefore the jurisdiction of the originating state, California, can apply.
States are divested of the power to regulate interstate commerce. This is squarely jurisdiction of federal government, not the states.
>Your comment confirmed that the value originated in one place
The bits originated in California. The value originated in Illinois. It was valueless to the company while locked in California. Perhaps it was valuable to someone else who never made the transaction in California, but not to the company in Illinois who actually paid for it.
>The company in Illinois compensated the employee for their time to generate intellectual property,
If the employer were simply paying for time then why not hire a prisoner or a nice retired old lady to sit in a chair for 8 hours a day? We both know they aren't paying for time, they're paying for the useful bits they have in Illinois. They want the IP, not to burn people's time.
>So then the work clearly has value prior to being packaged and sold to the end customer.
It has value to the customer in Illinois, not in California. It is valueless to the customer locked up in California. It has value perhaps to the employee in California, but not the employer (customer).
>You seem to have conflated the concept of an employee with that of a business or an independent contractor, which are not the same thing, and are not governed by the same laws
I haven't conflated, I'm showing the courts contradict themselves. They say it's fair game to charge sales tax even with no physical presence, with no tax paid to the other state with physical presence, but then want the exact opposite if you buy IP from an 'employee' instead of bullets from a company. It makes no sense. They want to have their cake and eat it too. One may argue such wishy-washy behavior is 'arbitrary and capricious' which could cast doubt on whether their rulings are even enforceable.
>No, the business is not "purchasing IP within their state lines", the business is employing a person who resides within another state, and therefore the business must abide by the employment laws of the employee's state, as well as the business state of origin. An example of buying IP would be purchasing a legal contract template, or a software license. In the examples I provided sales tax for the state where the purchase originated would apply.
We simply disagree here. I see that they are purchasing IP within their state lines, you see something completely different.
>I'm unsure if you are trolling or just very confused
I could say the same for the state of California. It seems they are trolling to go after someone in Illinois for buying bits in Illinois.
Once it was in Illinois it had value, before that it didn't have value to the buyer. Again it was useless to the Illinois company while locked up in California.
California wants to regulate interstate commerce, which of course is flatly unconstitutional. California's tax board is a clown circus of petty tyrants who have tortured and subjugated their victims for far too long.