In the 1896 case of Western Union Telegraph Company v. Indiana, the U.S Supreme Court ruled in favor of Indiana. The state had imposed a tax on telegraph companies operating within its borders, which Western Union argued was unconstitutional under both the Commerce Clause and Equal Protection Clause. However, the court found that as long as a company has a physical presence or conducts substantial business within a state's boundaries, it is subject to taxation by that state regardless of whether its operations also cross into other states. Furthermore, they held that this did not violate equal protection rights because different businesses can be classified differently for tax purposes based on their nature and method of operation.

In the dissenting opinion for Western Union Telegraph Company v. Indiana, Justice Harlan argued that the tax imposed by Indiana on telegraph companies was not a regulation of interstate commerce and therefore did not violate the Constitution. He believed that states should have the power to impose taxes on businesses operating within their borders as long as they do not interfere with interstate commerce or discriminate against out-of-state businesses. In this case, he felt that Western Union was using its status as an interstate business to avoid paying taxes in states where it operated but had no physical presence. This, according to him, gave them an unfair advantage over local competitors who were required to pay these taxes. Therefore, he disagreed with the majority's decision and would have upheld Indiana's law taxing telegraph companies.