In the 1924 case Gorham Manufacturing Company v. State Tax Commission of the State of New York, et al., the U.S Supreme Court ruled in favor of Gorham Manufacturing Company. The company had challenged a tax assessment by New York's state tax commission on its stock held outside of New York but owned by residents within the state. The court found that this taxation was unconstitutional as it violated due process rights under Fourteenth Amendment because it taxed property located beyond its jurisdictional boundaries without providing any benefits or protections to such property in return for taxes levied upon them. This ruling established an important precedent regarding interstate commerce and taxation laws, asserting that states cannot impose taxes on out-of-state properties owned by their residents unless they provide some form of benefit or protection to those properties.

The dissenting opinion in the Gorham Manufacturing Company v. State Tax Commission of New York case argued that the majority's decision to uphold a tax on out-of-state corporations was inconsistent with previous rulings and violated constitutional principles. The dissenters believed that the tax, which was levied based on total capital rather than just income generated within New York state, unfairly burdened interstate commerce and infringed upon federal authority over such matters. They contended that this approach allowed states to impose their own regulatory regimes onto national economic activity, disrupting uniformity and creating potential for conflict between different jurisdictions' laws. Furthermore, they suggested it could lead to double taxation if other states followed suit by taxing all of a corporation’s capital regardless of where it is employed or where its profits are earned.