Example: Technically if you have a quilt-making business and sell three $1,000 quilts off Etsy and one of those quilts goes to someone in California, you owe California a tax return even if you live in some other state. BTW if you happen to be organized as an LLC, you'll also technically owe California an $800 LLC franchise tax.
Can you expand on this? Etsy started collecting California Sales tax, and the CDTFA says an individual who solely operates through such marketplaces is no longer responsible to collect, report, and pay the fee(s) due on your California retail sales facilitated through their marketplace. So that tells me you don't need to file a sales tax return.
Is it because of California's new interpretation on sales from outside of California, in this
Technical Advice Memorandum?
Because vendors on Etsy can provide post-sale support by chat or email, like washing instructions on your example of the quilt, it seems to fall under the "Business B" fact pattern. That California wants to call email and live chat support of a sold item a disqualifying business activity is ridiculous. They claim the reason is because it's a post-sale activity and the sale has already taken place. But answering questions post-sale is absolutely part of soliciting more business.
The Technical Memorandum makes some good points, for example if you use Fulfilment by Amazon, and they store your stuff in a warehouse in California, I agree you'd have a California presence. But I really wish there were a way to get States and the Feds to agree on what the rules of the country are without needing to have a state randomly tax everyone until someone sues them and it goes to the federal courts to decide where the line is. I also think the lawmakers get lost when "technology" comes into play. For example, there isn't so large a difference between emailing the vendor and calling the vendor to require separate laws.