In the case of Bekins Van Lines, Inc. v. Riley, State Controller of California (1929), the U.S Supreme Court ruled in favor of Bekins Van Lines, a moving company that had been assessed for taxes by the state controller's office based on its total gross receipts from operations both within and outside California. The court held that this method of taxation violated the Due Process Clause and Commerce Clause of the U.S Constitution because it did not fairly apportion tax liability according to where income was earned or business activity occurred. The decision established an important precedent regarding interstate commerce and state taxation powers; states cannot impose taxes on businesses in a way that discriminates against interstate commerce or burdens it excessively relative to intrastate commerce.

In the dissenting opinion for Bekins Van Lines, Inc. v. Riley, Justice Holmes argued that California's tax on interstate commerce was not discriminatory and therefore did not violate the Commerce Clause of the U.S. Constitution. He believed that since all businesses operating in California were subject to this tax, it was a fair exercise of state power rather than an undue burden on interstate commerce. Furthermore, he contended that if every state imposed similar taxes on business operations within their borders, there would be no discrimination against any particular company or industry involved in interstate trade as they would all bear equal responsibility for supporting public services provided by states where they operate.