The U.S. Supreme Court case Director of Revenue of Missouri v. CoBank ACB, as successor to the National Bank of Cooperatives in 2000 centered around whether or not a federal instrumentality was exempt from state taxes under federal law and if this exemption extended to its private shareholders. The court ruled that while the bank itself was tax-exempt due to its status as a federally chartered instrumentality, this did not extend to dividends paid out by the bank to its shareholders because they were private entities rather than part of the government entity. Therefore, these dividends could be taxed by states without violating any constitutional principles or laws.

In the dissenting opinion for Director of Revenue of Missouri v. CoBank ACB, Justice Thomas disagreed with the majority's interpretation that a federal statute exempted CoBank from paying non-discriminatory state taxes. He argued that this exemption should only apply to Farm Credit Banks and not to banks like CoBank which are part of the larger Farm Credit System but do not have 'Farm Credit Bank' in their title. According to him, Congress did not intend for all entities within the system to be tax-exempt when it passed legislation allowing these banks to merge or reorganize into different forms while retaining certain privileges. Instead, he believed that each entity should retain its original statutory rights and obligations after reorganization unless explicitly stated otherwise by Congress. Therefore, since there was no explicit provision granting tax exemptions post-reorganization in this case, he concluded that CoBank should pay state taxes.