In Alward v. Johnson, Treasurer of California (1930), the U.S Supreme Court dealt with a dispute over inheritance tax law in California. The plaintiff, Alward, was an heir to a deceased person's estate and contested the state treasurer's assessment of inheritance taxes on property located outside of California. According to Alward, this action violated his constitutional rights under the Fourteenth Amendment’s due process clause as it taxed property not within its jurisdiction. However, the court ruled against him stating that while states generally cannot tax personal properties situated beyond their borders directly; they can indirectly do so by taxing transfers or successions occurring within their jurisdictions even if those involve out-of-state properties. Therefore, it upheld that there was no violation of due process and affirmed California's right to impose such taxes.

In the dissenting opinion for Alward v. Johnson, it was argued that the majority's decision to uphold a California law taxing foreign corporations on their entire capital stock, regardless of how much business they conducted within the state, violated both due process and equal protection principles under the Fourteenth Amendment. The dissent contended that this tax imposed an undue burden on interstate commerce by effectively penalizing out-of-state businesses for conducting any operations in California. It also asserted that there was no rational basis for treating foreign corporations differently from domestic ones in terms of taxation. Furthermore, it suggested that such discriminatory treatment could potentially discourage out-of-state companies from doing business in California at all - thereby harming not only those companies but also Californian consumers who would benefit from increased competition.