In the case of New Jersey Bell Telephone Company v. State Board of Taxes and Assessments of the State of New Jersey, 1929, the Supreme Court ruled in favor of New Jersey Bell Telephone Company. The company had challenged a state tax assessment on its property arguing that it was discriminatory and violated both due process and equal protection clauses under the Fourteenth Amendment as other corporations were not taxed similarly for their intangible properties. The court agreed with this argument stating that while states have broad power to levy taxes, they cannot do so in a way that discriminates against certain entities or individuals without reasonable grounds. Therefore, it held that such an arbitrary classification by taxation authorities amounted to discrimination which is prohibited under constitutional law.

The dissenting opinion in the case of New Jersey Bell Telephone Company v. State Board of Taxes and Assessments of the State of New Jersey argued that the majority's decision was inconsistent with previous rulings regarding taxation on interstate commerce. The dissenting justices believed that, by allowing a state to tax an interstate business based on its total value - including property located and business conducted outside state borders - rather than just its operations within the state, it would lead to multiple states taxing the same entity for identical reasons, resulting in excessive taxation. They maintained this could potentially hinder or even destroy interstate commerce altogether. Furthermore, they contended that such a ruling contradicted earlier decisions which had established clear limitations on how far a single state can reach when imposing taxes on businesses operating across several states.