In the case of United States Bedding Company v. United States, 1924, the U.S. Supreme Court was tasked with determining whether a tax levied on filled mattresses constituted an excise or a sales tax. The court ruled that it was indeed an excise tax and therefore within Congress's power to impose under Article I, Section 8 of the Constitution which gives Congress authority to "lay and collect taxes." The plaintiff argued that this particular levy should be considered as a direct sales tax because it is imposed at the point of sale from manufacturer to retailer or consumer; however, this argument was rejected by the court. It held that since such articles are not necessarily sold but may also be rented out for use (as in hotels), taxing them does not constitute a direct taxation on their sale alone but rather can be seen as an indirect form of taxation falling into category of excises.

In the dissenting opinion for United States Bedding Company v. United States, it was argued that the majority's decision to uphold a tax on foreign corporations doing business within U.S. territory was unjust and unconstitutional. The dissenting justices believed that this tax violated principles of equal protection under the law, as domestic companies were not subject to similar taxation. They also took issue with how broadly "doing business" had been defined in order to apply this tax; even minimal or indirect involvement in commerce within U.S territories could trigger it, which they saw as an overreach of government power. Furthermore, they felt that such a heavy burden placed on foreign businesses would discourage international trade and harm economic growth overall.