In the case of Henneford et al. v. Northern Pacific Railway Co., 1937, the U.S Supreme Court ruled in favor of Washington State's right to impose a use tax on goods purchased out-of-state for use within its borders. The Northern Pacific Railway Company had argued that this tax was unconstitutional as it interfered with interstate commerce and violated the Due Process Clause of the Fourteenth Amendment. However, Justice Benjamin Cardozo, writing for a unanimous court, rejected these arguments stating that such taxes were not discriminatory or burdensome to interstate commerce if they were equal to what would have been paid if the property had been acquired in-state (a compensatory tax). He also stated that due process was satisfied because there was sufficient connection between Washington state and both taxpayer and taxed transaction.

In the dissenting opinion for Henneford et al. v. Northern Pacific Railway Co., Justice James Clark McReynolds argued that the tax imposed by Washington State on the use of tangible personal property brought into the state after being purchased elsewhere was unconstitutional. He believed it violated both due process and interstate commerce clauses of the Constitution, as it discriminated against out-of-state goods in favor of those produced within Washington State itself. The justice contended that this tax essentially served as a tariff or duty on imported goods, which is expressly prohibited under Article I, Section 10 of the Constitution. Furthermore, he asserted that such a levy could potentially lead to retaliatory taxation from other states and disrupt free trade among them - an outcome contrary to one of primary purposes behind forming a more perfect Union.