In the case of Hanover Fire Insurance Company v. Harding, County Treasurer in 1926, the Supreme Court examined whether a state could impose taxes on an out-of-state insurance company for premiums collected by independent brokers within that state. The Hanover Fire Insurance Company was incorporated in New York and had no office or agents based in Colorado but sold policies through local independent brokers who were not employees of the company. The State of Colorado imposed a tax on these transactions which Hanover contested as unconstitutional under both due process and commerce clause grounds. The Supreme Court ruled against Hanover, upholding Colorado's right to levy such taxes. It found that while the business model used by Hanover may have been designed to avoid taxation within states where it did not maintain offices or direct employees, this did not exempt them from being taxed on business conducted within those states via independent contractors acting as their intermediaries.

The dissenting opinion in the case of Hanover Fire Insurance Company v. Harding, County Treasurer argued that the majority's decision to invalidate a tax on foreign corporations doing business within a state was incorrect. The dissent maintained that such taxes were not discriminatory or unconstitutional, but rather an appropriate exercise of state power to regulate commerce and protect local businesses from unfair competition. They contended that states have the right to impose conditions upon foreign corporations seeking to do business within their borders as long as those conditions are reasonable and non-discriminatory. Furthermore, they disagreed with the majority's interpretation of what constitutes "doing business," arguing that it should be broadly defined to include any significant corporate activity within a state, not just formal incorporation or establishment of headquarters there.