In the 1899 case of May v. New Orleans, the U.S. Supreme Court ruled on a dispute involving taxation and interstate commerce. The city of New Orleans had imposed a tax on every bale of cotton compressed within its limits for shipment or transportation to any point outside Louisiana, which was challenged by May as unconstitutional under the Commerce Clause. The court held that while states have broad power to tax businesses operating within their borders, they cannot impose taxes that discriminate against interstate commerce or place an undue burden upon it. Therefore, this specific tax was deemed unconstitutional because it specifically targeted goods being transported out-of-state and thus interfered with interstate commerce in violation of federal law.

In the dissenting opinion for May v. New Orleans, Justice Harlan argued that the city of New Orleans had no right to impose a tax on interstate commerce activities such as loading and unloading cargo from ships. He contended that this power belonged solely to Congress under the Commerce Clause of the Constitution. Harlan believed that allowing local authorities to levy taxes on these activities would lead to chaos, with different jurisdictions imposing their own varied charges and regulations, thereby disrupting free trade among states. Furthermore, he asserted that if every port charged similar fees it could potentially cripple national commerce by making it prohibitively expensive. Thus, in his view, upholding such a tax was not only unconstitutional but also detrimental to economic activity across state lines.