In the 1913 case Farmers and Mechanics Savings Bank of Minneapolis v. State of Minnesota, the U.S. Supreme Court ruled in favor of the state's right to tax national banks under certain conditions. The bank argued that it was exempt from taxation due to its status as a federally chartered institution, but Minnesota countered this claim by asserting its power to levy taxes on all real estate within its borders, including that owned by national banks. The court held that while federal law did indeed protect national banks from being taxed by states on their shares or capital, it did not extend this protection to real estate owned by these institutions within state boundaries. Therefore, Minnesota's actions were deemed constitutional and the bank was required to pay property taxes.

The dissenting opinion in the Farmers and Mechanics Savings Bank of Minneapolis v. State of Minnesota case argued that the state's tax law, which taxed national banks based on their capital stock while taxing state banks only on their real estate holdings, was unconstitutional. The justice believed this violated the Fourteenth Amendment's Equal Protection Clause because it treated similar entities differently without a rational basis for doing so. He also contended that such differential treatment could potentially harm national banks by placing them at a competitive disadvantage compared to state banks. Furthermore, he disagreed with the majority's interpretation of federal banking laws as permitting states to tax national bank shares however they wished; instead, he interpreted these laws as requiring equal taxation between state and national banks.