In the 1932 case of First National Bank of Shreveport et al. v. Louisiana Tax Commission et al., the U.S Supreme Court ruled on a dispute regarding taxation powers between state and federal entities. The First National Bank of Shreveport, along with other national banks in Louisiana, challenged an attempt by the state to impose taxes on their shares at rates higher than those applied to other moneyed capital in competition with them within the state's jurisdiction. They argued that this violated Section 5219 of Revised Statutes which sought uniformity in tax treatment for all financial institutions operating within a given jurisdiction. The court held that while states have broad power to levy taxes, they cannot discriminate against national banking associations or treat them less favorably compared to local financial institutions under federal law (Section 5219). Therefore, it was unconstitutional for Louisiana to impose higher tax rates on shares owned by shareholders in these national banks than what was imposed on competing moneyed capital investments within its borders.

In the dissenting opinion for the case of First National Bank of Shreveport et al. v. Louisiana Tax Commission et al., it was argued that the majority's decision to uphold a tax on shares held by banks in federal reserve banks violated principles of intergovernmental tax immunity. The dissenters believed this taxation constituted an impermissible burden on federal operations, as it indirectly taxed a federal instrumentality (the Federal Reserve). They contended that such indirect taxation could potentially disrupt or influence federal activities and thus should be prohibited under established precedent protecting against state interference with government functions. Furthermore, they disagreed with the majority's distinction between direct and indirect taxes, arguing instead for a broader interpretation of immunity from state taxation when it comes to instruments used by the Federal Government in executing constitutional powers.