In the case of Railway Express Agency, Incorporated v. Virginia in 1930, the U.S Supreme Court was tasked with determining whether a state law that imposed taxes on businesses operating within its borders but incorporated elsewhere violated the Commerce Clause of the Constitution. The plaintiff, Railway Express Agency (REA), argued that it should not be subject to taxation by Virginia because it was incorporated in Delaware and only had offices and conducted business activities in Virginia. However, the court ruled against REA stating that states have a right to tax corporations doing business within their boundaries even if they are chartered elsewhere as long as such taxation does not discriminate against interstate commerce or place an undue burden upon it. This decision upheld states' rights to levy taxes on out-of-state corporations conducting substantial business operations within their jurisdiction.

In the dissenting opinion for Railway Express Agency, Inc. v. Virginia, Justice Stone argued that the statute in question was not a valid exercise of state power because it discriminated against interstate commerce without any substantial relation to public safety or welfare. He believed that the law's prohibition on transporting advertising materials across state lines was arbitrary and unreasonable, as there were other less restrictive means available to achieve its purported goal of preventing traffic congestion and distractions to drivers. Furthermore, he pointed out inconsistencies in how the law treated different types of advertisements - allowing some while banning others with no clear rationale behind these distinctions. Thus, he concluded that this selective regulation violated both due process and equal protection principles under the Fourteenth Amendment.