In the 1934 case of City Bank Farmers Trust Co. v. Schnader, Attorney General et al., the U.S Supreme Court was tasked with deciding on a dispute regarding inheritance tax laws in Pennsylvania. The plaintiff, City Bank Farmers Trust Co., acting as an executor for a deceased estate holder who had bequeathed funds to various charities and educational institutions outside of Pennsylvania, argued that these out-of-state beneficiaries should not be subject to state inheritance taxes. However, under existing Pennsylvania law at that time, only gifts given to domestic charitable organizations were exempt from such taxation. The defendant - the Attorney General and other officials representing Pennsylvania - maintained that this law did not violate any constitutional rights or principles since it applied equally to all estates within its jurisdiction regardless of where their beneficiaries resided. Ultimately, the Supreme Court ruled in favor of the defendants by upholding Pennsylvanian's right to impose its own tax laws within its borders without interference from federal authorities or courts unless they clearly contravened national constitution provisions which wasn't proven here.

In the dissenting opinion for the case of City Bank Farmers Trust Co. v. Schnader, it was argued that Pennsylvania's inheritance tax law should not apply to securities held in New York by a resident of Pennsylvania at the time of his death. The dissenting justices believed that this application violated both due process and interstate commerce clauses under the U.S Constitution as they felt that Pennsylvania had no jurisdiction over property located in another state, even if owned by one of its residents. They also expressed concern about potential double taxation issues if other states followed suit and taxed their own residents on out-of-state properties or assets upon their deaths.