In the case of International Harvester Co. v. Wisconsin Department of Taxation (1943), the U.S Supreme Court ruled in favor of the Wisconsin Department of Taxation, upholding a state tax on income derived from interstate commerce. The court found that although International Harvester was an Illinois-based company, its operations within Wisconsin were substantial enough to warrant taxation by the state without violating constitutional protections against undue burdens on interstate commerce. This decision confirmed states' rights to levy taxes on businesses operating within their borders even if those businesses are primarily engaged in interstate commerce and headquartered elsewhere.

In the dissenting opinion for International Harvester Co. v. Wisconsin Department of Taxation, Justice Jackson argued that the majority's decision to uphold a tax on an out-of-state corporation violated principles of interstate commerce and due process. He contended that the state was unfairly taxing income earned outside its jurisdiction by attributing it to in-state activities based on arbitrary apportionment formulas rather than actual business operations or profits derived from within the state. This, he believed, resulted in double taxation and undue burdens on interstate businesses which could potentially discourage them from operating across state lines - contrary to constitutional protections for free trade among states. Furthermore, he expressed concern about potential retaliation by other states leading to escalating inter-state economic conflicts detrimental to national unity and prosperity.