In the 1991 case of Allied-Signal, Inc., as Successor-in-Interest to The Bendix Corporation v. Director, Division of Taxation, the U.S Supreme Court ruled in favor of New Jersey's tax assessment on an out-of-state corporation's capital gain from selling its stake in another company. Allied-Signal had argued that this was unconstitutional under both Due Process and Commerce Clauses because it did not have a substantial nexus with New Jersey. However, the court held that there was sufficient connection between Allied-Signal’s business activities within New Jersey and their investment for taxation purposes. The court also found no violation of interstate commerce since they deemed the tax fairly apportioned based on income generated within state borders.

The dissenting opinion in the case of Allied-Signal, Inc., as successor-in-interest to The Bendix Corporation v. Director, Division of Taxation disagreed with the majority's decision that New Jersey could not tax a portion of the capital gain realized by Allied from its sale of an investment in Asarco Incorporated. The dissent argued that this was inconsistent with previous rulings where it had been established that states can tax income generated within their borders or from businesses operating there. They contended that since Asarco did business and owned property in New Jersey, it was reasonable for the state to impose a tax on gains derived from such investments. Furthermore, they believed that denying states this right would lead to significant revenue losses and create incentives for corporations to manipulate their finances so as to avoid taxation altogether.