Many modern business transactions have moved or are moving to more of a services model and location becomes less important. These transactions tend to challenge many tax rules, particularly at the state level. For example, instead of buying software (either on CD or via download) to install on my computer and maintain, I might be able to just use the software while it is on the distributor's server and it doesn't matter where the server is or where I am as long as I have an Internet connection. Should that transaction be subject to sales tax - is it a service or equivalent to the acquisition of software? Where should it be taxed if taxable.
These "cloud computing" issues are slowly being addressed by state tax agencies and not always consistently, even within the same state!
I've got a short article in the AICPA Corporate Taxation Insider (5/27/10) on tax issues of cloud computing - here.
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