In the case of Tyler Pipe Industries, Inc. v. Washington State Department of Revenue (1986), the U.S Supreme Court ruled on whether a state tax was discriminatory under the Commerce Clause. The court held that Washington's manufacturing and wholesaling taxes were not fairly apportioned because they taxed value added by out-of-state activities, thus violating interstate commerce principles. The court also found that Tyler Pipe had substantial nexus with Washington due to its in-state sales representatives who maintained sample products and solicited orders for approval at their Texas headquarters, thereby subjecting them to state taxation laws despite being an out-of-state corporation.

In the dissenting opinion for Tyler Pipe Industries, Inc. v. Washington State Department of Revenue, Justice O'Connor disagreed with the majority's interpretation of interstate commerce and its application to tax law. She argued that the majority had incorrectly applied a four-part test from Complete Auto Transit, Inc. v Brady (1977) which determines whether a state tax violates the Commerce Clause of the Constitution. According to her view, this case was not about multiple taxation or discrimination against interstate commerce but rather about apportionment - how much income should be attributed to business activities within a particular state for taxation purposes? She believed that there was no constitutional requirement for states to use any specific method in determining this amount as long as it is fairly related to services provided by the state and does not lead to double taxation or discriminate against out-of-state businesses.