In the Quaker City Cab Company v. Commonwealth of Pennsylvania case in 1927, the Supreme Court ruled on a dispute involving taxation and interstate commerce. The state of Pennsylvania had imposed an annual tax on commercial vehicles, including those owned by Quaker City Cab Company. The company argued that this was unconstitutional as it interfered with interstate commerce since their taxis occasionally crossed state lines for business purposes. However, the Supreme Court disagreed and upheld Pennsylvania's right to levy such a tax. They reasoned that although some cabs did engage in occasional out-of-state trips, their primary function was local transportation within city limits which fell under the jurisdiction of state law rather than federal interstate commerce regulations.

In the dissenting opinion for Quaker City Cab Company v. Commonwealth of Pennsylvania, Justice Stone argued that the tax imposed by Pennsylvania on gross receipts was not a direct burden on interstate commerce but rather an indirect one. He contended that such taxes were permissible as long as they did not discriminate against or unduly burden interstate commerce, which he believed this tax did not do. The majority's decision to strike down the tax, in his view, would lead to a situation where states could no longer levy any form of taxation on businesses involved in interstate commerce - something he saw as untenable and contrary to established precedent. Furthermore, Justice Stone expressed concern about potential negative impacts on state revenue sources and their ability to provide necessary services if such taxes were deemed unconstitutional.