In the 1919 case Cream of Wheat Company v. County of Grand Forks, North Dakota, the U.S. Supreme Court was asked to decide on a taxation issue involving interstate commerce. The Cream of Wheat Company had its manufacturing plant in Grand Forks and sold its product across state lines. The company argued that it should not be taxed by North Dakota for inventory held in the factory intended for shipment out-of-state as this would interfere with interstate commerce and violate the Commerce Clause of the Constitution which gives Congress exclusive power over such trade. The court ruled against Cream of Wheat, upholding North Dakota's right to tax all property within its borders regardless if it is destined for sale outside state lines or not. It reasoned that until goods have actually started moving towards their destination they are still part of general mass within a state and can be subjected to local taxation without interfering with federal control over interstate commerce.

The dissenting opinion in the Cream of Wheat Company v. County of Grand Forks case argued that the company's property should not be exempt from taxation. The justice disagreed with the majority's interpretation of North Dakota law, which they believed allowed for such an exemption if a business was engaged in manufacturing or other productive industries. They contended that this interpretation was too broad and could potentially allow any business to claim an exemption simply by stating it is involved in some form of production. Furthermore, they pointed out inconsistencies between state laws regarding tax exemptions and those at federal level, arguing that these discrepancies needed to be resolved before granting such exemptions. Ultimately, they felt that allowing businesses like Cream of Wheat to avoid paying taxes would place an unfair burden on individual taxpayers who do not have similar opportunities for tax relief.