In the 1925 case Evansville and Bowling Green Packet Company v. Chero Cola Bottling Company, the U.S. Supreme Court ruled on a dispute over interstate commerce and taxation. The Evansville & Bowling Green Packet Co., an Indiana-based company that operated steamboats carrying passengers and freight across state lines, challenged taxes imposed by Kentucky municipalities for using their wharves to load/unload goods. They argued this was unconstitutional as it interfered with interstate commerce which is under federal jurisdiction according to the Commerce Clause of Constitution. The court disagreed with them, ruling in favor of Chero Cola Bottling Co., stating that these were not direct taxes on interstate commerce but rather fees for services provided by local governments (i.e., use of wharf). The court held that such charges did not violate the Commerce Clause because they represented fair compensation for a service rendered - usage of docking facilities - rather than being an attempt to regulate or impede trade between states.

In the dissenting opinion for Evansville and Bowling Green Packet Company v. Chero Cola Bottling Company, Justice McReynolds disagreed with the majority's decision to uphold a state tax on goods transported across state lines by waterways. He argued that such taxation was an infringement upon interstate commerce, which is under federal jurisdiction according to the Constitution. The justice believed that allowing states to impose taxes on interstate commerce would lead to chaos as each state could potentially enact its own set of rules and regulations, thereby disrupting uniformity in trade practices. Furthermore, he contended that this ruling contradicted previous court decisions which had established clear boundaries between federal and state powers over commerce regulation.