In the case of State Board of Tax Commissioners of Indiana v. Jackson, the U.S Supreme Court ruled on a dispute involving taxation and interstate commerce. The court held that an Indiana tax law which imposed higher taxes on goods manufactured within the state for sale outside its borders than those produced for in-state consumption was unconstitutional. This decision was based on the Commerce Clause of the Constitution, which gives Congress exclusive authority to regulate interstate commerce. The court found that by imposing a higher tax rate on out-of-state sales, Indiana's law discriminated against interstate commerce and thus violated this clause. Therefore, it concluded that states cannot use their taxing power to favor local industries over out-of-state competitors or burden out-of-state transactions with additional costs.

In the dissenting opinion for the case of State Board of Tax Commissioners of Indiana v. Jackson, Justice Stone argued that there was no violation of the Fourteenth Amendment's Equal Protection Clause. He contended that it is within a state's power to tax property located within its borders and owned by non-residents at a higher rate than similar property owned by residents. The majority had ruled otherwise, stating such differential treatment constituted discrimination against non-residents. However, Justice Stone believed this view misconstrued the purpose and scope of equal protection guarantees under constitutional law; he maintained these protections were not designed to eliminate all differences in taxation but rather only those which are arbitrary or unreasonable. In his view, differentiating between resident and non-resident owners could be justified on several grounds including administrative convenience or compensating for benefits provided to residents which are unavailable to non-residents.