In the case of Western Live Stock et al. v. Bureau of Revenue et al., 1937, the U.S Supreme Court was tasked with determining whether a state could impose an income tax on out-of-state corporations for revenue derived from advertisements in their publications distributed within that state. The plaintiffs were publishers based outside New Mexico but had subscribers and advertisers in the state. They argued that New Mexico's imposition of an income tax violated both due process and interstate commerce clauses as they did not have sufficient business presence or "nexus" within the state to justify taxation. The court ruled against Western Live Stock, upholding New Mexico's right to levy taxes on revenues generated by ads placed by businesses operating within its borders even if those ads appeared in magazines published elsewhere. The court reasoned that since these companies benefited economically from their commercial interactions with residents of New Mexico, it was fair for them to contribute towards public expenses through taxation.

In the dissenting opinion for Western Live Stock et al. v. Bureau of Revenue et al., Justice Butler argued that the New Mexico tax law, which imposed a higher rate on out-of-state corporations than in-state ones, was unconstitutional as it violated both the Due Process and Equal Protection Clauses of the Fourteenth Amendment. He contended that this discriminatory taxation placed an unfair burden on interstate commerce and inhibited free trade among states. Furthermore, he disagreed with majority's view that such differential treatment could be justified by additional services provided to foreign corporations or their greater potential threat to state welfare; instead he believed these reasons were speculative at best and did not warrant unequal taxation rates between domestic and foreign businesses operating within New Mexico.