In the 1932 case of Anglo-Chilean Nitrate Sales Corp. v. Alabama, the U.S Supreme Court ruled in favor of Alabama, upholding its right to tax foreign corporations operating within its borders. The plaintiff, Anglo-Chilean Nitrate Sales Corporation - a New York-based company with operations in Chile and other states - argued that it should not be subject to taxation by Alabama as it was already taxed by New York and did not have a significant presence or property in Alabama. However, the court held that since the corporation had obtained a license to do business in Alabama and had conducted sales there through an agent for several years, it was liable for taxation under state law regardless of where its physical assets were located or whether it paid taxes elsewhere.

In the dissenting opinion for the Anglo-Chilean Nitrate Sales Corp. v. Alabama case, it was argued that the state of Alabama did not have jurisdiction over a foreign corporation that had no physical presence or property in the state and conducted its business through independent contractors. The justice disagreed with majority's view that solicitation of orders by an agent constituted doing business within a state, arguing this interpretation expanded states' taxing power beyond constitutional limits. He contended such taxation could discourage interstate commerce and harm national unity by allowing each state to impose burdens on out-of-state corporations based solely on their economic activity within its borders.