In the case of Pure Oil Company v. State of Minnesota, 1918, the U.S Supreme Court ruled in favor of the state's right to regulate interstate commerce within its borders. The Pure Oil Company had challenged a Minnesota law that required all petroleum products sold in the state to be inspected and tested for safety before being distributed. The company argued this was an unconstitutional interference with interstate commerce as it imposed additional costs on out-of-state businesses. However, Justice Day delivered the opinion of a unanimous court stating that while states cannot directly regulate or burden interstate commerce, they can exercise their police powers to protect public health and safety even if it indirectly affects such trade. Therefore, requiring inspection and testing for quality control purposes was deemed reasonable regulation rather than an undue burden on interstate commerce.

In the dissenting opinion for Pure Oil Company v. State of Minnesota, it was argued that the state's imposition of a tax on oil companies operating within its borders did not violate the Commerce Clause of the U.S. Constitution. The justice believed that states have an inherent right to levy taxes on businesses conducting operations within their jurisdiction as part of their power to regulate local affairs and protect public welfare. They contended that this taxation does not interfere with interstate commerce because it is applied equally to all oil companies in Minnesota, regardless if they are based out-of-state or locally. Therefore, there is no discrimination against interstate commerce which would make such a tax unconstitutional under the Commerce Clause.