In the case of Gwin, White & Prince, Inc. v. Henneford et al., 1938, the U.S Supreme Court ruled on a dispute involving interstate commerce and state taxation laws. The plaintiff was an out-of-state corporation that sold goods to customers in Washington State but maintained no offices or employees there; instead it shipped orders from its New York office via common carrier or mail directly to its customers in Washington. The issue at hand was whether Washington could impose a tax on these sales without violating the Commerce Clause of the Constitution which prohibits states from interfering with interstate commerce. The court held that such a tax did not violate this clause because it was applied equally to both intrastate and interstate transactions - thus treating all sellers fairly regardless of their location - and therefore did not place an undue burden on interstate commerce. This decision affirmed states' rights to levy taxes on sales made within their borders even if those sales were conducted by out-of-state entities.

In the dissenting opinion for Gwin, White & Prince, Inc. v. Henneford et al., Justice Butler argued that Washington State's tax on the use of goods brought into the state was unconstitutional because it violated both the Commerce Clause and Due Process Clause of the Constitution. He believed that this tax unfairly burdened interstate commerce by taxing goods from other states more heavily than those produced within Washington itself. Furthermore, he contended that due process was violated because taxpayers were not given a fair opportunity to challenge their assessments before they became final and payable under threat of severe penalties. Ultimately, Justice Butler concluded that these constitutional violations rendered Washington's use tax invalid.