The U.S. Supreme Court case Matson Navigation Co. et al. v. State Board of Equalization of California in 1935 revolved around the issue of taxation on interstate commerce, specifically whether a state could tax a company's property that was used both within and outside its borders for commercial purposes. The plaintiff, Matson Navigation Company, argued that California's imposition of taxes on their ships - which were used for both intrastate and interstate trade - violated the Commerce Clause by burdening interstate commerce unfairly. However, the court ruled against Matson Navigation Company stating that as long as there is no discrimination against or direct regulation of interstate commerce involved, states are allowed to impose such taxes under their inherent taxing power granted by the Constitution.

In the dissenting opinion for Matson Navigation Co. et al. v. State Board of Equalization of California, Justice Stone argued that the majority's decision was inconsistent with previous rulings regarding interstate commerce and taxation by states. He contended that there should be no difference in how a state taxes property used exclusively within its borders versus property used both inside and outside its borders, as long as it is physically present within the state at some point during the tax year. In his view, allowing such differentiation would lead to unequal treatment under law and potentially encourage discriminatory practices against out-of-state businesses or properties based on their interstate activities.