In the case of Barwise et al., Trustees v. Sheppard, Comptroller of Texas, et al., 1936, the U.S Supreme Court dealt with a dispute over taxation. The trustees for bondholders of an insolvent corporation in Texas argued that they were exempt from paying taxes on income derived from oil and gas leases because it was held in trust for out-of-state beneficiaries who weren't residents of Texas. However, the State contended that since the property was located within its jurisdiction and managed by resident trustees, it could be taxed accordingly under state law. The court ruled in favor of Texas stating that while states cannot tax non-residents' incomes earned outside their borders or impose taxes on trusts based solely on beneficiary residence status; they can levy taxes when both trustee residency and trust management occur within their boundaries even if beneficiaries live elsewhere.

The dissenting opinion in the case of Barwise et al., Trustees, v. Sheppard, Comptroller of Texas, et al., argued that the majority's decision to uphold a tax on oil and gas production was unconstitutional. The dissenting justices believed that this tax violated both the due process clause and equal protection clause of the Fourteenth Amendment because it unfairly targeted one specific industry for taxation while leaving others untouched. They also disagreed with the majority's interpretation of "gross value at well" as including transportation costs incurred by producers after extraction from wells but before sale or use; they contended such an interpretation resulted in double taxation since these costs were already taxed separately under other provisions. Furthermore, they expressed concern about potential negative impacts on interstate commerce given that many oil and gas companies operate across state lines.