In the case of Northwestern Mutual Life Insurance Company v. Wisconsin, 1927, the U.S Supreme Court ruled in favor of Northwestern Mutual Life Insurance Company. The court held that a state cannot tax an insurance company based on its worldwide income; instead, it can only levy taxes based on the portion of business conducted within its jurisdiction. This ruling was made after Wisconsin attempted to impose an income tax on all profits earned by Northwestern Mutual Life Insurance Company - including those generated outside of Wisconsin's borders. The decision established a significant precedent regarding interstate commerce and taxation laws in America: states could not extend their taxing powers beyond their geographical boundaries.

The dissenting opinion in the case of Northwestern Mutual Life Insurance Company v. Wisconsin argued that the majority's decision to uphold a tax on out-of-state insurance companies was unconstitutional. The dissenters believed that this tax violated the Commerce Clause, which gives Congress exclusive power over interstate commerce. They contended that by taxing an out-of-state company for doing business within its borders, Wisconsin was effectively regulating interstate commerce and thus infringing upon federal jurisdiction. Furthermore, they disagreed with the majority's assertion that insurance is not commerce but rather a contract; they maintained it should be considered as part of trade or traffic and therefore subject to regulation under the Commerce Clause. Lastly, they expressed concern about potential negative consequences if other states followed suit and imposed similar taxes on out-of-state businesses.