In the 1936 case Great Northern Railway Co. v. Washington, the U.S Supreme Court ruled on a dispute involving taxation by the state of Washington on railroads that crossed into multiple states. The Great Northern Railway Company argued that it was being unfairly taxed for its operations in other states and sought relief from paying taxes to Washington State based on an apportionment formula used by the state which they claimed violated both due process and equal protection clauses of Fourteenth Amendment. The court held that while interstate commerce should not be subjected to double taxation, there is no constitutional mandate requiring uniformity in tax apportionment formulas among different states. It found no violation of due process or equal protection as long as each state's method reasonably attributed a portion of value generated from within its borders. The court also noted that if any unfairness arose because some states might assess more than their fair share, this issue would need to be addressed through legislative action rather than judicial intervention.

In the dissenting opinion for Great Northern Railway Co. v. Washington, Justice Stone argued that the tax imposed by Washington State on interstate rail carriers was not discriminatory and did not violate the Commerce Clause of the U.S. Constitution as claimed by the majority opinion. He contended that this tax was a property tax levied equally upon all businesses operating within state boundaries, regardless of whether they were involved in interstate commerce or not. Therefore, he saw no reason why an interstate railway company should be exempt from paying it while other local businesses had to pay their fair share of taxes for using and benefiting from public services provided by the state government such as roads, schools etc., which are funded through these taxes.