In the case of City of Sault Ste. Marie v. International Transit Company, 1913, the U.S Supreme Court ruled in favor of the International Transit Company (ITC). The city had attempted to impose a license fee on ITC for its ferry operations between Michigan and Ontario, Canada. However, ITC argued that this was an interference with interstate and international commerce which is regulated by federal law under the Commerce Clause of the Constitution. The court agreed with ITC's argument stating that local authorities cannot interfere or burden foreign or interstate commerce without explicit permission from Congress. Therefore, it held that such a tax imposed by a municipality would be unconstitutional unless authorized by state legislation approved by Congress.

The dissenting opinion in the case of CITY OF SAULT STE. MARIE v. INTERNATIONAL TRANSIT COMPANY argued that the city had no right to impose a license fee on the International Transit Company for its ferry operations across St Mary's River, which forms part of an international boundary between Canada and United States. The justice held that such regulation was within federal jurisdiction as it involved interstate and foreign commerce, not local or municipal authority. They contended that allowing cities to regulate these activities could lead to inconsistencies and conflicts with national policy regarding international trade and transportation, potentially causing diplomatic issues with other nations. Therefore, they disagreed with the majority's decision upholding the city's power to levy this tax.