In the case of Citizens National Bank v. Commonwealth of Kentucky for the Use and Benefit of Boyle County, 1909, the U.S Supreme Court was tasked with determining whether a state could tax national banks on their shares at rates higher than those imposed on other moneyed capital in the hands of individual citizens. The bank argued that such taxation violated federal law which stipulated equal treatment between national banks and local competitors. However, Kentucky's court held that this did not violate any laws as it considered all corporations to be taxed equally under its system regardless if they were banking institutions or not. Upon appeal to the Supreme Court, it ruled in favor of Kentucky stating that there was no discrimination against national banks because all corporate stocks (including those from non-banking entities) were subjected to similar taxes within Kentucky’s jurisdiction.

In the dissenting opinion for Citizens National Bank v. Commonwealth of Kentucky, Justice Holmes argued that the bank should not be held liable for taxes on bonds owned by non-residents but kept in its vaults. He reasoned that these bonds were not property within the state and thus could not be subjected to taxation under Kentucky law. According to him, a bond is an obligation of a debtor to pay a certain sum at a future date; it does not represent any tangible or physical property located within any particular jurisdiction. Therefore, he concluded that such intangible personal properties cannot be taxed by states where they are merely stored or kept safe without violating due process rights guaranteed by the Fourteenth Amendment.