In the case of Connecticut ex rel. New York & New England Railroad Company v. Woodruff in 1893, the U.S Supreme Court was tasked with deciding whether a state could tax an interstate railroad company's property located within its borders. The State of Connecticut had imposed taxes on the New York and New England Railroad Company for its tracks and other properties situated within Connecticut's boundaries, which the railroad company contested as unconstitutional under federal law governing interstate commerce. The court ruled that states do have authority to levy such taxes without violating constitutional provisions regarding interstate commerce or due process rights. It held that railroads are not exempt from taxation by states where their lines run through because they engage in both intrastate and interstate business operations; hence, it is permissible for a state to tax those portions of an out-of-state corporation’s property found within its jurisdiction. This decision affirmed states' power over local affairs while also recognizing federal supremacy in matters concerning inter-state trade - thus maintaining a balance between state sovereignty and national unity.

In the dissenting opinion for Connecticut ex rel. New York & New England Railroad Company v. Woodruff, it was argued that the court majority erred in its interpretation of a state statute regarding taxation of railroad property. The dissent maintained that the statute did not intend to exempt railroads from paying taxes on their real estate holdings, but rather aimed to prevent double taxation by ensuring they were only taxed once on their operational assets (like tracks and equipment). This view held that any additional real estate owned by these companies should be subject to regular property tax just like any other landowner's would be. Therefore, according to this perspective, the decision of lower courts which ruled in favor of taxing such properties should have been upheld instead of being overturned by the Supreme Court.