In the case of United States Fidelity and Guaranty Company of Baltimore v. Commonwealth of Kentucky in 1913, the Supreme Court ruled on whether a state could tax an out-of-state insurance company for premiums collected within its borders. The U.S. Fidelity and Guaranty Company, based in Maryland but operating in Kentucky, argued that it was being unfairly taxed by Kentucky as it had already paid taxes on these premiums to Maryland. However, the court held that states have the right to impose such taxes under their police powers if they are not discriminatory or unreasonable. It found that this did not violate due process rights nor constitute double taxation since each state was taxing a different aspect - one where money is earned (Kentucky) and another where business is domiciled (Maryland). Therefore, the judgment affirmed Kentucky's right to levy said tax.

In the dissenting opinion for United States Fidelity and Guaranty Company of Baltimore v. Commonwealth of Kentucky, Justice Holmes disagreed with the majority's interpretation that a state could impose taxes on an out-of-state corporation based solely on its business transactions within the state. He argued that such taxation was unconstitutional as it violated due process rights under the Fourteenth Amendment. According to him, this would mean any company doing interstate commerce could be taxed by every single state in which they conducted business, leading to potential double or multiple taxations - a situation he believed was unfair and unjustifiable. Furthermore, he contended that if states were allowed to levy taxes in this manner without clear guidelines or limitations set forth by Congress, it would lead to chaos and confusion among businesses operating across different states.