In the case of American Sugar Refining Company v. Louisiana (1900), the U.S. Supreme Court ruled in favor of the state, upholding its right to tax corporations operating within its borders. The American Sugar Refining Company, a New Jersey corporation with operations in Louisiana, challenged a state law that imposed taxes on all sugar refining companies based on their capital stock value. The company argued this was unconstitutional as it violated both due process and equal protection clauses by taxing out-of-state corporations more heavily than local ones. However, the court disagreed stating that states have broad powers to levy taxes for revenue purposes and can differentiate between different types of businesses or property without violating constitutional principles so long as there is no clear transgression against reason or justice. It also noted that while interstate commerce cannot be directly taxed by states under federal law, activities related to such commerce conducted within a state's boundaries are subject to taxation.

In the dissenting opinion for American Sugar Refining Company v. Louisiana, Justice Harlan argued that the tax imposed by Louisiana on sugar produced outside of the state and held in original packages within its borders was unconstitutional. He contended that this tax violated both the Commerce Clause and Equal Protection Clause of the Constitution. The Commerce Clause prohibits states from enacting legislation that interferes with interstate commerce, while the Equal Protection clause mandates equal treatment under law for all citizens. According to Justice Harlan, taxing out-of-state sugar at a higher rate than local product constituted discrimination against goods brought into Louisiana from other states, thereby interfering with interstate commerce and violating equal protection rights of non-Louisiana producers.