In the case of Binney et al. v. Long, Commissioner of Corporations and Taxation, 1936, the U.S Supreme Court was asked to determine whether Massachusetts could tax a trust established by a resident where neither the trustee nor any assets were located in Massachusetts. The court ruled that it was unconstitutional for Massachusetts to impose an income tax on such trusts as this would violate due process rights under the Fourteenth Amendment. This decision set important precedent regarding state taxation powers over out-of-state entities or individuals.

In the dissenting opinion for Binney et al. v. Long, Commissioner of Corporations and Taxation, Justice Cardozo disagreed with the majority's decision that Massachusetts could tax a trust based on the residence of its trustee rather than where it was administered or where its property was located. He argued that this interpretation violated due process rights because taxation should be tied to benefits provided by the state - in this case, protection of property or administration services - which were not present here as neither assets nor administrative activities were in Massachusetts. The justice also expressed concern about potential double taxation if other states followed suit and taxed trusts based on trustees' residences while still taxing them at their actual locations too.