In the case of State Tax Commission of Utah v. Pacific States Cast Iron Pipe Co., 1962, the U.S. Supreme Court ruled in favor of Pacific States Cast Iron Pipe Company (Pacific). The issue at hand was whether or not Utah's use tax violated the Commerce Clause by discriminating against interstate commerce. The tax required that any goods purchased from out-of-state vendors for storage, use or consumption within Utah be subject to a compensating use tax if sales taxes were not paid in another state. However, this did not apply to similar purchases made within the state itself. The court found that this taxation system placed an unfair burden on interstate commerce as it created a commercial advantage for local businesses over their out-of-state competitors who sold identical products but had to charge higher prices due to additional taxation costs imposed by Utah’s law. Therefore, it was concluded that such differential treatment between intrastate and interstate transactions constituted discrimination against interstate commerce which is prohibited under the Commerce Clause of U.S Constitution.

In the dissenting opinion for the case of State Tax Commission of Utah v. Pacific States Cast Iron Pipe Co., Justice Douglas argued that there was no constitutional violation in taxing a corporation's entire net income, even if some portion is derived from interstate commerce. He contended that this tax did not discriminate against interstate commerce as it applied to all corporations operating within the state, regardless of whether their business activities were solely intrastate or involved both intra and interstate operations. Furthermore, he pointed out that such taxation does not necessarily burden or obstruct interstate trade; rather it merely requires businesses to contribute towards public expenses in states where they operate and derive benefits. In his view, any attempt by a state to impose taxes on an apportioned basis would be impractical and could potentially lead to double taxation issues.