In the 1906 case of American Smelting and Refining Company v. Colorado ex rel. Lindsley, the U.S Supreme Court was asked to consider whether a state law that imposed taxes on ore mined within its borders violated the Commerce Clause of the Constitution if some or all of that ore was destined for out-of-state processing. The American Smelting and Refining Company argued that since their ores were intended for interstate commerce, they should be exempt from taxation by individual states under federal laws governing interstate trade. However, Colorado countered this argument by stating it had a right to tax products produced within its boundaries before they entered into commerce with other states. The Supreme Court ruled in favor of Colorado, holding that until goods have actually started moving in interstate commerce - i.e., physically left the state - they are subject to local jurisdiction and can therefore be taxed accordingly without violating any constitutional provisions regarding interstate trade.

In the dissenting opinion for American Smelting and Refining Company v. Colorado ex rel. Lindsley, Justice Harlan disagreed with the majority's ruling that upheld a state law imposing taxes on foreign corporations operating in Colorado. He argued that this law violated the Equal Protection Clause of the Fourteenth Amendment because it discriminated against out-of-state businesses by taxing them at higher rates than local ones without any reasonable basis for such differential treatment. Harlan contended that there was no substantial difference between domestic and foreign corporations to justify unequal tax burdens, as both types of entities contributed equally to public revenues through their business operations within the state. Therefore, he believed that this discriminatory taxation constituted an arbitrary deprivation of property rights protected under federal constitutional law.