In the case of Tilt v. Kelsey, Comptroller of the State of New York in 1907, the U.S Supreme Court was tasked with determining whether a tax imposed by New York on stock transfers violated the Commerce Clause or Due Process Clause of the Constitution. The plaintiff, Tilt, argued that since he was an Illinois resident and his stocks were held in Chicago trusts (although they represented ownership in corporations based primarily in other states), New York had no jurisdiction to levy taxes on these transactions. However, because some business activities related to these stocks occurred within its borders - such as meetings between shareholders and directors - New York claimed it did have taxing authority over them. The Supreme Court ruled against Tilt's claims and upheld New York's right to impose this tax. It concluded that while interstate commerce cannot be directly taxed by states due to federal supremacy under the Commerce Clause, indirect taxation is permissible if it does not interfere with interstate trade or discriminate against out-of-state entities. Furthermore, regarding due process concerns about extraterritorial taxation without representation or benefit received from state services provided for residents only; it found sufficient connections existed between these stock transactions and economic activity occurring within NY justifying their inclusion into its taxable base.

The dissenting opinion in the case of TILT v. KELSEY, COMPTROLLER OF THE STATE OF NEW YORK, 1907 argued that the majority's decision was inconsistent with previous rulings and principles established by the court. The dissenters believed that a state has no right to tax property located outside its jurisdiction, regardless of whether or not it is owned by a resident within its borders. They contended that such taxation violates fundamental principles of fairness and equity because it imposes an undue burden on out-of-state property owners who receive no benefits from the taxing state. Furthermore, they asserted that this type of extraterritorial taxation undermines national unity by encouraging states to engage in discriminatory practices against non-residents. In their view, each state should only have power over properties within its own territory for purposes of taxation.