The U.S. Supreme Court case American Bank & Trust Co. et al. v. Dallas County et al., 1982, revolved around the issue of whether a Texas statute that allowed counties to impose ad valorem taxes on national bank shares but not on state-chartered banks was in violation of federal law prohibiting discriminatory taxation against national banking associations. The court ruled in favor of Dallas County, stating that the Texas tax scheme did not violate federal law because it treated all shareholders equally regardless of where their bank was chartered and thus did not discriminate against national banks or their shareholders specifically.

In the dissenting opinion for American Bank & Trust Co. et al. v. Dallas County et al., Justice O'Connor, joined by Chief Justice Burger and Justices Powell and Rehnquist, argued that the majority's decision was a departure from established precedent regarding tax immunity of federal obligations under 31 U.S.C §742 (now codified at 31 U.S.C §3124(a)). The dissenters believed that this statute should be interpreted to grant broad immunity to federal obligations from non-federal taxation unless Congress explicitly provides otherwise. They contended that the majority’s interpretation of “nondiscriminatory” taxes as those which treat state and private bonds similarly would lead to an absurd result where virtually all state-imposed taxes on interest earned on federal obligations would be permissible because they also apply equally to interest earned on other types of bonds. This, according to them, undermines the purpose of tax exemption for federally issued securities - encouraging their purchase by making them more attractive investments than competing corporate or municipal bonds.