In the 1964 case Reserve Life Insurance Co. v. Bowers, Tax Commissioner of Ohio, the U.S Supreme Court ruled in favor of Bowers and upheld an Ohio law that imposed a tax on insurance companies incorporated outside of Ohio but doing business within the state. The Reserve Life Insurance Company challenged this law arguing it violated both the Equal Protection Clause and Commerce Clause of the Constitution by discriminating against out-of-state corporations. However, Justice Goldberg delivered a unanimous opinion stating that there was no violation as states have broad powers to levy taxes for revenue purposes and can treat foreign corporations differently from domestic ones if they are not similarly situated or engaged in identical businesses.

In the dissenting opinion for Reserve Life Insurance Co. v. Bowers, Justice Black disagreed with the majority's ruling that Ohio could tax an out-of-state insurance company on premiums collected from policyholders in Ohio. He argued that this decision contradicted previous rulings which held that a state cannot impose a direct tax on an out-of-state corporation unless it has sufficient connections or activities within the taxing state to justify such taxation. According to him, merely having policyholders in a state does not constitute enough of a connection for taxation purposes as these are passive and do not involve any active business operations by the insurer within the taxing jurisdiction. Furthermore, he contended that allowing states to levy taxes based solely on where policyholders reside would lead to multiple and potentially conflicting tax burdens being imposed upon insurers across different jurisdictions, thereby disrupting interstate commerce.