In the case of Terre Haute and Indianapolis Railroad Company v. Indiana Ex Rel. Ketcham, 1903, the U.S Supreme Court dealt with a dispute over taxation between the state of Indiana and a railroad company. The State had levied taxes on the railroad's gross earnings which included income from interstate commerce operations. The Railroad Company argued that this was unconstitutional as it violated their rights under federal law to engage in interstate commerce without undue burden by states' taxation policies. The court ruled in favor of Indiana, stating that while states cannot directly tax or regulate interstate commerce due to federal jurisdiction (the Commerce Clause), they can indirectly do so through property or franchise taxes - even if those properties or franchises are used for both intra- and inter-state business activities. In this instance, taxing gross receipts did not discriminate against out-of-state entities nor obstruct free trade among states; hence it didn't violate any constitutional provisions. This decision affirmed States' rights to levy non-discriminatory taxes on businesses operating within their borders regardless of whether these businesses also engaged in interstate commerce.

In the dissenting opinion for Terre Haute and Indianapolis Railroad Company v. Indiana Ex Rel. Ketcham, it was argued that the majority's decision to uphold a state law requiring railroads to provide separate accommodations for black and white passengers violated the Fourteenth Amendment of the U.S Constitution. The dissenting justices contended that such laws were inherently discriminatory and therefore unconstitutional, as they denied African American citizens equal protection under the law by forcing them into segregated facilities based solely on their race. They also expressed concern about potential negative consequences of this ruling, including further entrenchment of racial segregation in other areas of public life beyond railroad travel.