In the 1936 case of New York ex rel. Cohn v. Graves et al., the U.S. Supreme Court ruled that a state could tax its residents on income earned in another state without violating the Due Process Clause of the Fourteenth Amendment or interfering with interstate commerce, as long as it provided credit for taxes paid to other states. The case involved a resident of New York who had been taxed by his home state on income he had earned from property located in Connecticut and Massachusetts, despite having already paid taxes on this income to those states. He argued that this constituted double taxation and was therefore unconstitutional; however, the court disagreed, stating that such taxation was permissible because it did not deprive him of life, liberty or property without due process.

In the dissenting opinion for New York ex rel. Cohn v. Graves et al., Justice Benjamin Cardozo argued against the majority's decision to uphold a New York state tax on income derived from out-of-state securities and property. He contended that this ruling violated the Due Process Clause of the Fourteenth Amendment, which prohibits states from depriving any person of life, liberty or property without due process of law. According to Justice Cardozo, an individual should not be taxed by two jurisdictions - their home state and also where their investments are located - as it constitutes double taxation and is inherently unfair. Furthermore, he suggested that such a practice could discourage interstate commerce by deterring individuals from making out-of-state investments due to potential additional taxes imposed by other states.