In the 1915 case Rast, Tax Collector for Duval County, Florida v. Van Deman & Lewis Company, the U.S Supreme Court ruled that a state tax on out-of-state corporations doing business within its borders was not unconstitutional. The court held that states have the right to impose taxes on foreign corporations conducting business in their jurisdiction as long as it does not interfere with interstate commerce or violate due process rights under the Fourteenth Amendment. In this case, Van Deman & Lewis Co., an Ohio corporation selling goods in Florida but without any physical presence there (no property or employees), was taxed by Duval County's tax collector. The company argued this violated their constitutional rights and appealed to higher courts after losing at a lower level. However, Justice Mahlon Pitney delivered the opinion of a unanimous court upholding Florida’s right to levy such taxes.

In the dissenting opinion for Rast v. Van Deman & Lewis Company, Justice Holmes disagreed with the majority's view that a Florida tax on out-of-state businesses was unconstitutional. He argued that there should be no constitutional issue as long as the state treated all companies equally and did not discriminate against interstate commerce. According to him, if a company chooses to do business in multiple states, it must accept each state's laws and regulations without expecting special treatment or exemptions from taxes imposed by those states. The justice believed that this principle is fundamental to maintaining balance among different jurisdictions within our federal system of government.