The Federal Land Bank of St. Paul v. Bismarck Lumber Co., et al., 1941, is a case that revolved around the issue of whether or not a federal land bank was exempt from paying certain taxes under North Dakota law. The Federal Land Bank had purchased property at a foreclosure sale and subsequently sold it to another party, during which time they were assessed for real estate taxes by the state of North Dakota. The bank argued that as an instrumentality of the federal government, it was immune from such taxation under both its chartering legislation and broader principles of intergovernmental tax immunity. However, in this case, the Supreme Court ruled against them stating that while federal instrumentalities are generally protected from state taxation by virtue of their functionally governmental nature; this protection does not extend to all activities undertaken by these entities especially when they engage in commercial transactions like buying and selling properties similar to private corporations or individuals. Therefore, even though Federal Land Banks are federally chartered institutions with some degree of implied constitutional immunity from state taxation due to their role in implementing national agricultural policy; they can still be subject to non-discriminatory ad valorem property taxes on real estate held for purely investment purposes without violating any principle inherent in our system's dual sovereignty structure.

In the dissenting opinion for Federal Land Bank of St. Paul v. Bismarck Lumber Co., Justice Black disagreed with the majority's interpretation that federal land banks were immune from state taxation under Section 26 of the Federal Farm Loan Act, arguing that this was not Congress' intent when drafting the legislation. He believed that such an exemption would unfairly privilege these institutions over other local businesses and disrupt a state's ability to manage its own fiscal affairs. Furthermore, he argued against interpreting silence on a matter in Congressional law as implying consent or prohibition, stating it is not within judicial purview to infer legislative intention from absence rather than presence of express statutory language. In his view, if Congress had intended for such sweeping tax immunity they would have explicitly stated so in clear terms.