In the 1926 case of Fairmont Creamery Company v. Minnesota, the U.S Supreme Court ruled in favor of Fairmont Creamery Company, stating that a tax imposed by Minnesota on creameries operating within its borders but incorporated elsewhere was unconstitutional. The court found that this violated both the Due Process Clause and Commerce Clause of the Constitution as it discriminated against interstate commerce. This decision reinforced previous rulings which held that states could not impose taxes or regulations which unduly burdened or discriminated against interstate commerce, thereby upholding principles central to maintaining an integrated national economy.

In the dissenting opinion for Fairmont Creamery Company v. Minnesota, Justice Holmes argued that the state of Minnesota had a legitimate interest in regulating and taxing corporations operating within its borders. He disagreed with the majority's view that such regulations were an undue burden on interstate commerce. Instead, he believed that states should have broad powers to regulate businesses as long as they did not discriminate against out-of-state companies or interfere with federal authority over interstate commerce. In his view, it was entirely appropriate for a state to impose taxes and other requirements on corporations doing business within its territory even if those corporations also engaged in interstate trade.