In City of Philadelphia v. The Collector, the United States Supreme Court was asked to decide whether a federal tax imposed on distilled spirits could be collected from the city of Philadelphia. The court held that Congress had no authority under the Constitution to impose such a tax and thus it could not be collected from the city. In its opinion, Chief Justice Chase wrote that while Congress has broad powers over interstate commerce, it does not have unlimited power over all matters within state boundaries; rather, only those matters which are necessary for carrying out its enumerated powers can be regulated by Congress. He further noted that taxation is an important means of regulating commerce but in this case there was no connection between taxing distilled spirits and any legitimate purpose related to interstate commerce or other constitutional purposes. Therefore, he concluded that imposing such a tax on Philadelphia would exceed Congressional authority and violate principles established in earlier cases regarding states’ rights versus federal power.

In City of Philadelphia v. The Collector, the Supreme Court was asked to decide whether a federal tax imposed on certain documents issued by state and local governments constituted an unconstitutional burden on states' rights. In a 5-4 decision, the majority held that Congress had acted within its constitutional authority in imposing such taxes. Justice Field dissented from this opinion, arguing that Congress did not have the power to impose such taxes without violating both the Tenth Amendment and Article I of the Constitution which reserves all powers not delegated to Congress for either individual states or citizens themselves. He argued further that if allowed to stand it would lead directly to taxation without representation as well as other abuses of power by Congress over state governments.