In Bank v. Tennessee, the United States Supreme Court was asked to decide whether a state could constitutionally tax a national bank. The case arose when the Bank of Tennessee, a national bank, refused to pay a state tax on its capital stock. The Bank argued that the tax was unconstitutional because it violated the Supremacy Clause of the United States Constitution. The Supreme Court held that the state tax was unconstitutional because it interfered with the exclusive power of Congress to regulate national banks. The Court reasoned that the power to tax is the power to destroy, and that the state tax would interfere with the exclusive power of Congress to regulate national banks. The Court also held that the state tax was unconstitutional because it violated the Contract Clause of the United States Constitution. The Court reasoned that the state tax would interfere with the Bank's contractual obligations to its shareholders. In conclusion, the Supreme Court held that the state tax was unconstitutional because it interfered with the exclusive power of Congress to regulate national banks and violated the Contract Clause of the United States Constitution. The Court's decision established that states cannot tax national banks without the permission of Congress.

Justice Field delivered the dissenting opinion in Bank v. Tennessee, arguing that the state of Tennessee had not overstepped its authority by enacting a law requiring banks to pay taxes on their capital stock. He argued that states have broad powers when it comes to taxation and can impose taxes on any property within their borders as long as they do so fairly and uniformly. Furthermore, he noted that while Congress has exclusive power over interstate commerce, this does not mean it has exclusive power over all aspects of banking; rather, states are still allowed to regulate certain aspects such as taxation. In conclusion, Justice Field argued that since there was no conflict between federal and state laws in this case, the Court should defer to the decision made by the legislature of Tennessee regarding bank taxation.