The U.S. Supreme Court case Phoenix Fire and Marine Insurance Company v. Tennessee in 1895 revolved around the issue of taxation on insurance companies operating within state boundaries but incorporated outside of them. The Phoenix Fire and Marine Insurance Company, an out-of-state corporation, argued that it was unconstitutional for the State of Tennessee to impose a tax on premiums received from policies issued within the state because this violated both due process rights under the Fourteenth Amendment and interstate commerce regulations. However, the court ruled against Phoenix Fire and Marine Insurance Company stating that states have authority to regulate businesses operating within their borders even if they are incorporated elsewhere. It further clarified that such taxes do not interfere with interstate commerce as long as they are applied equally to all insurers doing business in a particular jurisdiction regardless of where they are incorporated or headquartered. This decision upheld states' rights to levy taxes on out-of-state corporations conducting business within their jurisdictions without violating constitutional principles related to due process or interference with interstate commerce.

In the dissenting opinion for Phoenix Fire and Marine Insurance Company v. Tennessee, Justice Harlan argued that the majority's ruling was inconsistent with previous decisions of the Court regarding interstate commerce. He contended that insurance contracts should be considered as part of interstate commerce and therefore protected from state taxation under the Commerce Clause of the Constitution. The justice disagreed with treating insurance companies differently than other types of businesses engaged in interstate trade, noting it would create a dangerous precedent where states could impose taxes on any type of business they chose to classify outside 'commerce.' Furthermore, he expressed concern about potential negative impacts on national uniformity in commercial regulation if individual states were allowed to tax out-of-state insurers at their discretion.