In the 1943 case General Trading Co. v. State Tax Commission of Iowa, the U.S Supreme Court ruled that a state could impose a use tax on goods purchased for consumption within its borders even if those goods were ordered from an out-of-state seller who had no physical presence in the taxing state. The court held that such taxes did not violate the Commerce Clause of the Constitution as long as they were applied to all transactions equally and did not discriminate against interstate commerce. This decision upheld Iowa's imposition of a use tax on items purchased by mail order from Minnesota-based General Trading Company by residents of Iowa, despite arguments from General Trading Company claiming this was unconstitutional.

The dissenting opinion in the case of General Trading Co. v. State Tax Commission of Iowa argued that the majority's decision was inconsistent with previous rulings regarding interstate commerce and taxation. The dissenting justices believed that the tax imposed by Iowa on out-of-state retailers who delivered goods within its borders constituted a direct burden on interstate commerce, which would be unconstitutional under the Commerce Clause of the U.S Constitution. They contended that this tax unfairly discriminated against out-of-state businesses, as it essentially forced them to act as tax collectors for Iowa without receiving any benefits or protections from the state in return. Furthermore, they expressed concern about potential negative impacts on national economic unity if other states were to adopt similar taxes.