In the case of Bonet, Treasurer v. Texas Company (P.R.), Inc., 1939, the U.S Supreme Court was tasked with deciding whether Puerto Rico's tax laws were constitutional under the Jones Act. The Texas Company argued that they were being unfairly taxed by Puerto Rico and sought to recover taxes paid under protest. They claimed that these taxes violated their rights as a corporation incorporated in Delaware and doing business in Puerto Rico. However, after reviewing the facts of the case, Justice Hugo Black delivered an opinion for a unanimous court upholding Puerto Rico's right to impose such taxes on corporations operating within its jurisdiction. The court held that while Congress had granted U.S citizenship to residents of Puerto Rican through Jones Act, it did not extend all constitutional protections applicable within states to this territory; therefore allowing local government considerable freedom in economic regulation including taxation policies.

The dissenting opinion in the case of Bonet, Treasurer v. Texas Company (P.R.), Inc., 1939, argued that Puerto Rico should be considered a foreign country for tax purposes under the U.S. Constitution and federal law. The dissent pointed out that while Puerto Rico is indeed a territory of the United States, it maintains its own distinct political system and legal structure separate from those of mainland America. Therefore, according to this view, taxes imposed by Puerto Rican authorities on American corporations doing business there should not be seen as domestic taxation but rather as foreign levies subject to credit against U.S federal income tax liability under Section 131(a) of Revenue Act 1928 and Section 238(a)(2) Internal Revenue Code.