The U.S. Supreme Court case Northwestern States Portland Cement Co. v. Minnesota (1958) revolved around the issue of whether a state could impose an income tax on out-of-state corporations for business activities conducted within its borders, even if the corporation's primary place of business was elsewhere. The court ruled in favor of Minnesota, stating that states have the right to levy taxes on interstate commerce as long as they are fairly apportioned and do not discriminate against or unduly burden interstate commerce. This decision upheld Minnesota's imposition of an income tax on Northwestern States Portland Cement Co., which had been conducting substantial business operations in the state despite being incorporated in Iowa.

In the dissenting opinion for Northwestern States Portland Cement Co. v. Minnesota, Justice Frankfurter argued that the majority's decision contradicted previous rulings regarding interstate commerce and taxation. He believed that allowing states to tax businesses based on their net income from interstate activities would lead to double taxation and burden interstate commerce unfairly, violating the Commerce Clause of the Constitution. Furthermore, he contended that such a ruling could potentially allow every state in which a company does business to levy an income tax on its total earnings, leading to excessive taxation and discouraging economic activity across state lines.