In the 1928 case of International Shoe Company v. Shartel, Attorney General of Missouri, et al., the U.S. Supreme Court was tasked with determining whether a state could impose an annual franchise tax on foreign corporations doing business within its borders. The International Shoe Company argued that it did not have sufficient presence in Missouri to warrant such taxation and that this imposition violated their Fourteenth Amendment rights to due process and equal protection under the law. However, the court ruled against them stating that as long as a corporation is conducting continuous and systematic business operations in a state, they are subject to local jurisdiction including taxation laws regardless of where their headquarters are located or incorporated. This decision set precedent for future cases involving corporate taxes by establishing "minimum contacts" standard which means if a company has minimum level of contact with a particular state then it can be subjected to jurisdictional rules including taxation.

In the dissenting opinion for International Shoe Company v. Shartel, Attorney General of Missouri et al., Justice Stone argued that the majority's decision to uphold a state law taxing foreign corporations based on their capital stock was unconstitutional. He contended that this tax violated both due process and equal protection clauses of the Fourteenth Amendment because it discriminated against out-of-state businesses by imposing an additional burden not faced by domestic companies. Furthermore, he disagreed with the majority's interpretation of "doing business" in a state as sufficient grounds for taxation, arguing instead that physical presence or property within a jurisdiction should be required before such taxes can be levied. The justice believed this ruling could potentially open up floodgates for states to unfairly target foreign corporations with excessive taxation without offering them any corresponding benefits or protections under local laws.