The U.S. Supreme Court case Interstate Oil Pipe Line Co. v. Stone, Chairman State Tax Commission in 1948 revolved around the issue of taxation on interstate commerce and whether it violated the Commerce Clause of the Constitution. The Interstate Oil Pipeline Company, an interstate carrier for hire transporting oil through pipelines across several states including Mississippi, was assessed a tax by Mississippi based on its gross income derived from transportation within and without the state. The company argued that this tax was unconstitutional as it burdened interstate commerce disproportionately to intrastate activities. However, the Supreme Court ruled against them stating that there was no violation of constitutional rights because all businesses operating within Mississippi were subject to similar taxes regardless if they engaged in purely local or both intra- and inter-state business operations; hence not discriminating against or placing undue burden upon interstate commerce specifically.

In the dissenting opinion for Interstate Oil Pipe Line Co. v. Stone, Justice Frankfurter disagreed with the majority's decision that Mississippi could not tax oil flowing through pipelines in its state if it originated and was destined for other states. He argued that this interpretation of interstate commerce was too narrow and did not consider modern realities of business operations across state lines. According to him, a pipeline company operating within a state should be subject to taxation by that state as long as the tax does not discriminate against interstate commerce or create undue burdens on it. The fact that oil is only temporarily within a particular jurisdiction while in transit does not exempt it from local taxation because such property enjoys protection under local laws during its passage through the territory.