Good question - it all comes down to a 2019 court ruling:
"The California Office of Tax Appeals in the Matter of the Appeal of Blair S. Bindley, OTA Case No. 18032402 ruled that an Arizona individual who had a contract for screenwriting services for two California LLCs had California source income on which he had to pay tax, even though all services were performed in Arizona."
"Because Bindley has precedential effect, it can be cited as authority by the state to broaden its tax reach. Those who provide services to customers within California from out of state may land in the crosshairs of California tax authorities even if they don’t live or perform services within California."
More on the case here and here.
