Ok, I am by no means an authority on the subject and IANAL (that's I am
not a lawyer) but here's my take on it.  It seems that California has
decided to treat internet sites as if they were physically located in
the state.  This allows them to require the internet site to collect
tax as if they were a local store.  The only reason a company that is
headquartered in one state has to charge sales tax on purchases (even
via phone or internet) in another state is if they have a physical
presence in that state.  For example if I were to purchase a Gateway
computer over the internet I would have to pay sales tax because
Gateway has a store in Kansas (which is where I would have the computer
shipped).  This physical presence does not have to even be a retail
store however.  If a company which is headquartered in Kansas has a
sales representative located in an office in Ohio then they will have
to charge sales tax to all orders shipped to Ohio.

I remember empty boxes occasionally arriving at my house in New Jersey
when I was growing up.  My aunt, who lived in New York, would have a
store ship an empty box out of state whenever she purchased something
expensive.  The small shipping charge was much less then the tax on the
item.  New York and New Jersey eventually closed this loophole by
requiring sales tax to be charged on out of state shipments to
neighboring states.

Hopefully, I remember all this correctly.  I'm sure someone will
highlight any factual errors.

Bryan