Although the constitutional text grants Congress power over interstate commerce, courts have long inferred a limit on state and local laws that burden it.
Discrimination against interstate commerce. A law that discriminates against out-of-state economic interests on its face, in purpose, or in effect is virtually invalid per se, sustainable only if it serves a legitimate local purpose that cannot be served by reasonable non-discriminatory alternatives.
Non-discriminatory burdens. Where a law regulates evenhandedly with only incidental effects, it is upheld unless the burden on interstate commerce is clearly excessive in relation to the local benefits.
Extraterritoriality. Regulation that has the practical effect of controlling conduct wholly outside the state has been held invalid, though recent authority has narrowed this line considerably.
The market participant exception. When a state acts as a buyer or seller rather than a regulator, it may prefer its own residents.
Congressional authorisation removes the constraint.
Where municipalities encounter it. Waste flow control ordinances, local preference in procurement, restrictions on out-of-district service providers, and licensing schemes with in-state residency or facility requirements. A local preference in purchasing is one of the most common ordinances that would not survive a serious challenge, and it is often adopted without any analysis at all.