In the 1917 case Dalton Adding Machine Company v. Commonwealth of Virginia at the Relation of the State Corporation Commission, the U.S. Supreme Court ruled in favor of Dalton Adding Machine Company, a foreign corporation operating in Virginia without having obtained a license to do so as required by state law. The court held that while states have broad powers to regulate businesses within their borders, they cannot discriminate against out-of-state companies or burden interstate commerce excessively. In this case, it was found that Virginia's requirement for foreign corporations to obtain licenses and pay fees not imposed on domestic corporations violated both principles; hence it was deemed unconstitutional under the Commerce Clause and Equal Protection Clause of Fourteenth Amendment.

The dissenting opinion in the case of Dalton Adding Machine Company v. Commonwealth of Virginia at the Relation of the State Corporation Commission argued that there was no constitutional violation by imposing a license tax on foreign corporations doing business within state borders. The justice contended that states have inherent power to regulate businesses operating within their jurisdiction, including levying taxes for revenue purposes. They maintained that such taxation does not interfere with interstate commerce as long as it is applied equally to both domestic and foreign corporations, thereby ensuring fair competition without discrimination against out-of-state entities. Furthermore, they asserted that this principle should apply regardless if a corporation's primary place of manufacture or assembly is outside the taxing state since its products are still sold and used within said state.