In the case of Nicol v. Ames in 1898, the U.S. Supreme Court ruled on a dispute regarding taxation and commerce laws. The plaintiff, Nicol, was a stockbroker who challenged an imposed tax on his business by arguing that it violated both the Commerce Clause and Due Process Clause of the Constitution. He claimed that his business transactions were interstate commerce which could not be taxed by state law according to Article I Section 8 of the Constitution (the "Commerce Clause"). Additionally, he argued that taxing these transactions without apportionment among states violated his Fifth Amendment rights under due process. The court disagreed with Nicol's arguments and upheld the tax as constitutional. It reasoned that while buying or selling stocks may involve interstate elements, they are not themselves part of interstate commerce but rather negotiations leading up to such trade; therefore they can be subject to local taxation without violating federal law or constitutionally protected rights.

In the dissenting opinion for NICOL v. AMES, Justice Harlan argued that the tax on futures contracts was not a direct tax but an excise or duty and therefore constitutional. He contended that such transactions were within Congress's power to regulate commerce among states as they had a significant impact on interstate trade and business conditions generally. Furthermore, he believed these transactions could be subject to taxation under Congress's broad authority to levy taxes for general welfare purposes. The majority’s ruling, in his view, unduly restricted this federal taxing power by classifying too many types of taxes as "direct" and thus requiring apportionment among states based on population - an often impractical requirement.