The U.S. Supreme Court case Adams Express Company v. Kentucky in 1906 revolved around the issue of interstate commerce and taxation by states. The Adams Express Company, an interstate carrier, was taxed by the state of Kentucky for carrying goods across state lines. The company challenged this tax on grounds that it violated the Commerce Clause of the Constitution which grants Congress exclusive power to regulate interstate commerce. However, in a unanimous decision, the Supreme Court upheld Kentucky's right to impose such taxes as long as they were not discriminatory or obstructive towards interstate commerce. This ruling established that while states cannot interfere with federal regulation of interstate trade, they can levy non-discriminatory taxes on businesses operating within their borders even if those businesses are involved in activities related to interstate commerce.

In the dissenting opinion for Adams Express Company v. Kentucky, Justice Holmes disagreed with the majority's decision that a state could tax an interstate business on its gross receipts. He argued that this was essentially taxing the company's operations in other states and thus violated the Commerce Clause of the Constitution which prohibits states from interfering with interstate commerce. Holmes believed that only net profits earned within a state should be subject to taxation by that state, not all revenue generated across multiple states. This view reflected his belief in limiting government interference in economic affairs and protecting businesses from potentially burdensome taxes imposed by individual states.