In the case of Rockford Life Insurance Co. v. Illinois Department of Revenue et al., 1986, the Supreme Court ruled in favor of the Illinois Department of Revenue. The court held that a state tax on insurance companies based on their receipt from policyholder premiums did not violate the Commerce Clause or Due Process Clause under U.S Constitution's Fourteenth Amendment as claimed by Rockford Life Insurance Company. The company had argued that it was unconstitutional for them to be taxed by Illinois since they were incorporated in Nebraska and most of their business operations took place outside Illinois, including premium collection and investment activities. However, the court found that because these policies covered risks located within Illinois, it was sufficient enough connection for taxation purposes without violating constitutional provisions.

In the dissenting opinion for Rockford Life Insurance Co. v. Illinois Department of Revenue, Justice Powell argued that the majority's decision contradicted previous rulings by allowing states to tax insurance companies differently based on their location. He believed this violated the Commerce Clause and Equal Protection Clause of the Constitution, which prohibit discriminatory taxation against interstate commerce and require equal treatment under law respectively. Furthermore, he contended that there was no substantial reason for Illinois to impose a higher tax rate on out-of-state insurers as it did not serve any legitimate state interest or policy goal other than raising revenue from non-residents who are unable to vote in local elections - an act he deemed unfair and unconstitutional.