In the case of Commonwealth Trust Company of Pittsburgh v. Smith et al., 1924, the U.S Supreme Court was tasked with determining whether a Pennsylvania state law that imposed an inheritance tax on property transferred upon death violated the Due Process Clause of the Fourteenth Amendment. The property in question included stocks owned by a deceased Pennsylvania resident in two corporations incorporated under New Jersey and New York laws but doing business within Pennsylvania. The court held that it did not violate due process rights to impose such taxes because states have jurisdiction over personal properties located within their boundaries, regardless of where they are incorporated or chartered. Therefore, even though these corporations were based out-of-state, since they conducted business and had substantial assets in Pennsylvania at the time of death, it was deemed appropriate for them to be subject to its inheritance tax laws.

In the dissenting opinion for the case of Commonwealth Trust Company of Pittsburgh v. Smith et al., Justice Holmes disagreed with the majority's decision to uphold Pennsylvania's inheritance tax law, which taxed property transferred upon death based on its value at time of transfer rather than at time of death. He argued that this interpretation was inconsistent with previous rulings and could lead to unfair taxation in cases where property values fluctuated significantly between a person’s death and when their estate was settled. Furthermore, he contended that it is not within a state’s power to impose taxes on future events or circumstances beyond its control such as changes in market conditions affecting asset values after an individual’s demise. Thus, he believed that taxing estates based on their worth at time of transfer rather than at moment of decedent's passing violated principles of fairness and due process under the Constitution.