In Edwards, Collector v. Chile Copper Company (1925), the U.S Supreme Court ruled in favor of the Chile Copper Company. The case revolved around a dispute over whether income from copper mines located in Chile but owned by an American company should be taxed as foreign or domestic income under U.S tax law. The court held that since the mining and selling operations were conducted entirely within Chile, it constituted foreign source income even though dividends were paid to shareholders residing in America. Therefore, this revenue was not subject to double taxation - once by the country where it was earned and again by the United States government where its parent company is based.

In the dissenting opinion for Edwards, Collector v. Chile Copper Company, Justice Holmes argued that the tax in question should not be considered a direct tax but rather an excise or duty. He reasoned that since it was imposed on foreign corporations for doing business within U.S territory and not directly on property or income, it fell under Congress's power to regulate commerce with foreign nations. Furthermore, he contended that even if viewed as a direct tax, it would still be constitutional because of its apportionment among states according to their respective populations. Thus, he disagreed with the majority view which held this taxation unconstitutional due to lack of uniformity across all states and territories.