In the case of Chase Manhattan Bank, N. A., et al. v. Finance Administration of City of New York et al., 1978, the U.S Supreme Court ruled in favor of the city administration by upholding a local law that imposed taxes on banks for their possession and use of stock held as collateral for loans made to brokers who were not residents or corporations within New York City limits. The court found that this tax did not violate either the Due Process Clause or Commerce Clause under Fourteenth Amendment rights because it was neither discriminatory nor excessive in relation to benefits provided by the state; rather it was fairly apportioned according to value and related activities conducted within its jurisdictional boundaries.

In the dissenting opinion for Chase Manhattan Bank, N. A., et al. v. Finance Administration of City of New York et al., Justice Powell argued that the majority's decision to uphold a New York law imposing a special tax on banks violated principles of intergovernmental tax immunity and unfairly discriminated against national banks in favor of state-chartered institutions. He contended that this ruling contradicted previous Supreme Court decisions which had established that states could not impose taxes on federal entities or activities without congressional approval, as it would interfere with their functioning and potentially undermine national sovereignty. Furthermore, he believed the law was discriminatory because it imposed heavier burdens on out-of-state banks than local ones, thus violating the Commerce Clause by hindering interstate commerce.