In the 1939 case of Ziffrin, Inc. v. Reeves, Commissioner of Revenue of Kentucky et al., the U.S Supreme Court ruled in favor of Ziffrin, a liquor distributor based in Illinois that was challenging a tax imposed by the state of Kentucky on its business operations within Kentucky's borders. The court found that while states have broad powers to regulate and tax businesses operating within their jurisdictions, these powers are limited by constitutional provisions protecting interstate commerce from undue burdens. In this case, it was determined that Kentucky's tax constituted an unfair burden on interstate commerce because it effectively taxed activities occurring outside its jurisdiction (i.e., Ziffrin's purchase and storage of alcohol in Illinois). Therefore, the court held that such taxation violated the Commerce Clause as well as Due Process Clause under Fourteenth Amendment which prohibits any state from depriving any person or corporation "of life liberty or property without due process." This ruling affirmed federal supremacy over states when regulating interstate commerce.

The dissenting opinion in the case of Ziffrin, Inc. v. Reeves argued that the tax imposed by Kentucky on trucks transporting liquor through its territory was not discriminatory and did not violate the Commerce Clause of the Constitution. The dissent pointed out that all trucks, regardless of their cargo or destination, were subject to a similar tax when using Kentucky's roads. Therefore, it was reasoned that this charge could be seen as a fair compensation for wear and tear caused by heavy vehicles rather than an attempt to regulate interstate commerce or discriminate against out-of-state businesses. Furthermore, they noted that if every state along a truck's route imposed such taxes without discrimination between local and interstate traffic then no burden would fall unfairly upon interstate commerce.