The National Geographic Society v. California Board of Equalization case in 1976 revolved around the issue of whether a state can impose use tax collection responsibilities on an out-of-state retailer that has certain activities within the state. The Supreme Court ruled in favor of the National Geographic Society, stating that under Commerce Clause jurisprudence, a physical presence is required for states to impose such obligations and this presence must be directly related to the taxable activity. In this case, although National Geographic had offices in California, these were not connected with its mail-order business which was conducted from Washington D.C., hence they could not be subjected to use tax collection duties by California.

In the dissenting opinion for National Geographic Society v. California Board of Equalization, Justice Brennan argued that a state should be able to tax an out-of-state corporation if it maintains offices and employees within the state, even if those offices are not directly involved in soliciting sales or other taxable activities. He disagreed with the majority's interpretation of "nexus," arguing that physical presence alone should establish sufficient connection for taxation purposes. Furthermore, he contended that this decision could lead to corporations structuring their operations in ways designed solely to avoid taxes by separating their income-generating activities from other functions performed within a taxing jurisdiction. This would undermine states' ability to levy taxes fairly and effectively on all businesses operating within their borders.