In the 1961 case Central Railroad Company of Pennsylvania v. Pennsylvania, the U.S. Supreme Court ruled in favor of the railroad company, striking down a state tax on freight tonnage as unconstitutional under Article I, Section 10 of the Constitution which prohibits states from imposing taxes on exports and imports without congressional consent. The State of Pennsylvania had imposed a tax on all freight carried by railroads within its borders including interstate commerce; however, this was found to be an infringement upon federal authority over interstate commerce. The court held that while states have power to levy property or income taxes on corporations operating within their boundaries - even those involved in interstate commerce - they cannot impose direct burdens such as tonnage duties which could potentially interfere with free flow of trade among states.

In the dissenting opinion for Central Railroad Company of Pennsylvania v. Pennsylvania, Justice Frankfurter argued that the majority's decision was inconsistent with previous rulings and principles regarding interstate commerce. He contended that the tax imposed by Pennsylvania on freight transported within its borders did not discriminate against interstate commerce as it applied equally to all carriers, regardless of whether they were involved in intrastate or interstate transport. Furthermore, he pointed out that this type of taxation had been upheld previously by the Court in other cases involving similar circumstances. Thus, according to him, there was no valid reason for striking down such a non-discriminatory tax now simply because some portion of the taxed activity happened to involve goods moving across state lines.