In the 1922 case of Heisler v. Thomas Colliery Company et al., the U.S Supreme Court ruled that a Pennsylvania state tax on anthracite coal mined and sold within the state was unconstitutional as it violated the Commerce Clause of the Constitution. The plaintiff, Heisler, argued that since some of this coal would eventually be shipped out-of-state for sale or use, taxing it while still in Pennsylvania interfered with interstate commerce. The court agreed with this argument stating that although states have broad powers to levy taxes, they cannot do so in a way which burdens interstate commerce or discriminates against it in favor of local business interests. This decision reinforced federal supremacy over interstate trade regulation and limited states' abilities to interfere with such trade through taxation.

In the dissenting opinion for Heisler v. Thomas Colliery Company et al., Justice Holmes argued that Pennsylvania's tax on anthracite coal mined and sold within the state was not a violation of the Commerce Clause, as majority ruled. He contended that since all stages of production occurred within Pennsylvania, it should be considered an internal affair rather than interstate commerce. The fact that some coal might eventually cross state lines did not make its initial mining and sale part of interstate commerce in his view. Furthermore, he pointed out inconsistencies with previous rulings where similar taxes were upheld by the court when applied to other goods like timber or oil produced entirely within one state but destined for out-of-state markets. Thus, he disagreed with majority’s decision declaring this tax unconstitutional.