In the case of Northwestern Mutual Life Insurance Company v. State of Wisconsin, 1917, the U.S. Supreme Court was asked to determine whether a tax imposed by Wisconsin on life insurance companies violated due process under the Fourteenth Amendment. The state had levied a tax based on income derived from both in-state and out-of-state business operations, which Northwestern Mutual Life Insurance Company argued was unconstitutional as it taxed income earned outside its jurisdiction. However, the court ruled against Northwestern Mutual Life Insurance Company stating that since they were incorporated within Wisconsin's borders and their charter allowed them to conduct business nationwide; therefore, all profits could be considered as having been generated within state lines regardless of where policyholders resided or premiums were paid. Thusly ruling that there was no violation of due process rights under the Fourteenth Amendment.

The dissenting opinion in the Northwestern Mutual Life Insurance Company v. State of Wisconsin case argued that the tax imposed by Wisconsin was not a property tax, but rather an excise or privilege tax on doing business within the state. The justice contended that it was inappropriate to treat this as a direct taxation on property held outside of Wisconsin's jurisdiction, and instead should be viewed as an indirect taxation related to conducting business operations within its borders. He further suggested that if every state where policyholders resided claimed similar taxes based on insurance reserves held elsewhere, it would result in multiple taxation and could potentially cripple businesses like life insurance companies who operate across many states. Therefore, he believed such interstate commerce should be protected from undue burdens placed upon them by individual states' taxing powers.