In the case of National Safe Deposit Company v. Stead, Attorney General of the State of Illinois (1913), the U.S Supreme Court was asked to determine whether a state law that taxed foreign corporations for doing business within its borders violated constitutional protections against interstate commerce regulation and due process rights. The National Safe Deposit Company, incorporated in New York but operating in Illinois, argued that it was being unfairly targeted by this tax because it did not have physical property or assets within the state. However, the court ruled in favor of Illinois stating that states do have authority to impose taxes on foreign corporations as long as they are conducting business within their jurisdiction regardless if they own any property there or not. This decision upheld states' rights to regulate and tax businesses operating within their boundaries even if those businesses were incorporated elsewhere.

In the dissenting opinion for National Safe Deposit Company v. Stead, Justice Holmes argued that the Illinois law taxing safe deposit companies was not unconstitutional as it did not violate due process or equal protection clauses of the Fourteenth Amendment. He contended that a state has every right to tax businesses operating within its jurisdiction and this power should be limited only by specific constitutional prohibitions. The justice believed that there is no inherent unfairness in imposing a higher tax on safe deposit companies than on other corporations because these entities enjoy unique benefits from their operations in Illinois such as increased security and stability which justify differential taxation. Therefore, he disagreed with the majority's decision to strike down the law based on perceived inequity.