In the case of Xerox Corp. v. County of Harris, Texas et al., 1982, the U.S. Supreme Court ruled in favor of Xerox Corporation, reversing a decision by the Texas Supreme Court that had upheld an ad valorem tax imposed on Xerox's inventory held for lease to customers within the state but stored outside it until leased out. The court found this taxation unconstitutional under both Due Process and Commerce Clauses as it was applied to property not located within Texas at any time during the tax year in question. The court stated that due process requires some definite link or minimum connection between a state and person, property or transaction it seeks to tax; similarly commerce clause prohibits states from taxing value earned outside their borders.

The dissenting opinion in the case of Xerox Corp. v. County of Harris, Texas argued that the majority's decision was inconsistent with previous rulings and principles regarding tax jurisdiction. The dissent emphasized that a state should have the power to impose taxes on businesses operating within its borders, even if their property is temporarily located out-of-state for leasing purposes. They contended that this temporary absence does not change the fact that these properties are part of a business operation generating significant income within Texas and therefore should be subject to taxation by Texas authorities. Furthermore, they pointed out inconsistencies between this ruling and other cases where businesses were taxed based on inventory held outside state lines but intended for sale within those states.