In the case of Dalton Adding Machine Company v. The State Corporation Commission of the Commonwealth of Virginia, 1914, the Supreme Court was asked to determine whether a state could impose a license tax on foreign corporations doing business within its borders. The Dalton Adding Machine Company, an Illinois corporation that sold and leased adding machines in Virginia without having any physical presence there beyond sales representatives, challenged a $50 annual license fee imposed by Virginia's State Corporation Commission. They argued this violated both their due process rights under the Fourteenth Amendment and interstate commerce clause protections. The Supreme Court disagreed with Dalton's arguments and upheld Virginia’s right to levy such taxes. It ruled that states have broad powers to regulate businesses operating within their boundaries for public welfare purposes even if those businesses are incorporated elsewhere or conduct much of their operations outside state lines. This includes imposing reasonable fees or taxes as long as they do not discriminate against out-of-state companies or unduly burden interstate commerce.

In the dissenting opinion for Dalton Adding Machine Company v. The State Corporation Commission of the Commonwealth of Virginia, it was argued that the majority's decision to uphold a state law imposing an annual license tax on foreign corporations doing business in Virginia violated both due process and equal protection clauses of the Fourteenth Amendment. The justice contended that this law unfairly discriminated against out-of-state businesses by subjecting them to higher taxes than those imposed on domestic companies, thereby creating an unjust barrier to interstate commerce. Furthermore, he asserted that such discriminatory taxation could potentially lead other states to enact similar laws as retaliatory measures which would further impede free trade among states. He also expressed concern over potential misuse or abuse of power by state governments under such legislation.