In the 1980 case Complete Auto Transit, Inc. v. Reis et al., the U.S Supreme Court established a four-prong test to determine whether a state tax on interstate commerce is permissible under the Commerce Clause of the Constitution. The court held that for such a tax to be valid it must meet these criteria: it must be applied to an activity with substantial nexus with the taxing state; it must be fairly apportioned; it cannot discriminate against interstate commerce; and, finally, it must relate reasonably to services provided by the state. This decision overruled previous rulings which had suggested that any form of taxation on interstate commerce was inherently discriminatory and thus unconstitutional.

In the dissenting opinion for Complete Auto Transit, Inc. v. Reis et al., Justice Powell argued that the majority's decision to uphold a state tax on interstate commerce was inconsistent with previous court rulings and could potentially disrupt national economic unity. He contended that the Commerce Clause of the Constitution should be interpreted as limiting states' ability to impose taxes on interstate commerce in order to prevent potential trade wars between states and maintain a unified national economy. Furthermore, he expressed concern about how this ruling might affect businesses involved in interstate commerce by subjecting them to multiple taxation from different states, which would ultimately increase costs for consumers nationwide.