This case was a dispute between the Philadelphia and Southern Steamship Company and the Commonwealth of Pennsylvania. The Steamship Company argued that the state had no right to impose a tax on the company's vessels, as they were engaged in interstate commerce. The Steamship Company argued that the tax was unconstitutional, as it violated the Commerce Clause of the United States Constitution. The Supreme Court ruled in favor of the Steamship Company, finding that the tax was unconstitutional. The Court held that the tax was a burden on interstate commerce, and thus violated the Commerce Clause. The Court also held that the tax was not a legitimate exercise of the state's power to tax, as it was not related to the company's activities within the state. The Court's decision was significant, as it established the principle that states cannot impose taxes on interstate commerce. This decision has been cited in numerous cases since, and has been used to protect businesses from unconstitutional taxation.

In Philadelphia and Southern Steamship Company v. Pennsylvania, the Supreme Court was tasked with determining whether a state law that imposed taxes on vessels owned by non-residents of the state violated the Commerce Clause of the Constitution. The majority opinion held that it did not violate this clause because it only taxed vessels based on their use within Pennsylvania's waters, regardless of ownership or residency status. Justice Field dissented from this decision, arguing that such taxation constituted an undue burden upon interstate commerce as it discriminated against out-of-state owners in favor of those who were residents of Pennsylvania. He argued further that Congress had exclusive authority to regulate foreign and interstate commerce under Article I Section 8 and thus any attempt by states to do so would be unconstitutional unless authorized by Congress itself.