In Escanaba Company v. Chicago, the Supreme Court of the United States was asked to decide whether the City of Chicago had the right to impose a tax on the Escanaba Company for the privilege of using the Chicago River for the purpose of transporting its goods. The Escanaba Company argued that the tax was unconstitutional because it was a tax on interstate commerce. The Supreme Court held that the tax was constitutional because it was not a tax on interstate commerce, but rather a tax on the privilege of using the Chicago River. The Court reasoned that the tax was not a burden on interstate commerce because it was imposed on the privilege of using the river, not on the goods themselves. Furthermore, the Court noted that the tax was not discriminatory and did not interfere with interstate commerce. The Court concluded that the tax was constitutional and that the City of Chicago had the right to impose it. The Court also noted that the tax was not excessive and that it was not an undue burden on the Escanaba Company.

In Escanaba Company v. Chicago, the Supreme Court was tasked with determining whether a state could tax goods that were shipped from another state into its own for sale and consumption. The majority opinion held that states had no authority to impose such taxes on interstate commerce, as it would be an unconstitutional burden on trade between states in violation of the Commerce Clause of the Constitution. Justice Field dissented from this ruling, arguing that while Congress has exclusive power over interstate commerce under Article I Section 8 of the Constitution, there is nothing preventing a State from taxing goods imported into their jurisdiction for sale or consumption within their borders. He further argued that if States are not allowed to tax these imports then they will be unable to raise revenue needed for public purposes and services without relying solely upon property taxes which can often lead to unfair taxation burdens on citizens who do not own real estate or other tangible assets subject to taxation by local governments.