In the case of Dewey v. Reynolds Metals Co., 1970, the United States Supreme Court addressed whether a state could impose its income tax on an out-of-state corporation that had no physical presence in the taxing state but sold goods there. The court held that due process did not prohibit Michigan from imposing its single business tax on Reynolds Metals Company, which was incorporated in Kentucky and had manufacturing facilities in Washington State but made sales to customers located within Michigan. The company's only connection with Michigan was through common carrier or mail deliveries of tangible personal property into the state for use by consumers there. Despite this limited contact, it was ruled that such activities were enough to establish "nexus" under both Due Process Clause and Commerce Clause analyses, thus allowing for taxation by the state.

In the dissenting opinion for Dewey v. Reynolds Metals Co., Justice Hugo Black argued that the majority's decision to allow states to impose taxes on businesses based on their total income, regardless of where it was earned, violated the Due Process Clause of the Fourteenth Amendment. He contended that a state should only be able to tax a business based on its in-state activities and not its nationwide or worldwide earnings. According to him, this ruling would lead to multiple taxation by different states which could potentially cripple interstate commerce and international trade. Furthermore, he criticized the court's reliance on International Harvester Co. v Department of Treasury as precedent because he believed it was wrongly decided due to similar reasons.