In the case of Interstate Consolidated Street Railway Company v. Commonwealth of Massachusetts, 1907, the U.S Supreme Court was asked to determine whether a state could impose taxes on an interstate railway company. The plaintiff, Interstate Consolidated Street Railway Company argued that it should not be subjected to taxation by Massachusetts as its operations were across multiple states and thus fell under federal jurisdiction due to the Commerce Clause in the Constitution. However, upon review, the court ruled against them stating that while interstate commerce is indeed regulated by Congress; this does not exempt such businesses from paying local or state taxes for property located within those jurisdictions. Therefore, even though they operated across several states including Rhode Island and Connecticut besides Massachusetts where their main office was situated; they still had physical assets like tracks and cars which were subject to local tax laws in each respective location.

In the dissenting opinion for Interstate Consolidated Street Railway Company v. Commonwealth of Massachusetts, it was argued that the tax imposed by Massachusetts on the railway company violated both due process and equal protection clauses of the Fourteenth Amendment. The justice contended that this taxation was not proportional to its operations within state boundaries, as a significant portion of its tracks extended beyond state lines into Rhode Island. Thus, taxing all assets without considering their geographical distribution seemed unfair and unconstitutional. Furthermore, he asserted that such an indiscriminate taxation method could potentially lead to multiple states claiming taxes from one entity based on total property value rather than in-state property alone - a situation which would be burdensome and unjust for interstate businesses like railways or telegraph companies operating across several jurisdictions.