In the case of First National Bank of Bay City v. Fellows, Attorney General of Michigan, on behalf of Union Trust Company et al., 1916, the U.S Supreme Court was tasked with determining whether a state law could impose an inheritance tax on money deposited in a bank by a non-resident decedent at the time of their death. The court held that such taxation was not permissible under federal law as it violated due process rights protected by the Fourteenth Amendment to the Constitution. This decision established that states cannot levy taxes on property located outside their jurisdiction and reaffirmed principles regarding interstate commerce and constitutional limitations on state power over such matters.

In the dissenting opinion for First National Bank of Bay City v. Fellows, it was argued that Michigan's law requiring out-of-state banks to pay a franchise tax should not be considered unconstitutional. The justice disagreed with the majority's view that this law violated the Fourteenth Amendment by depriving these banks of their property without due process of law. He contended that states have a right to impose taxes on businesses operating within their borders and believed there was no discrimination against out-of-state entities as all corporations were subject to similar taxation under state laws. Furthermore, he asserted that such regulations are necessary for maintaining control over foreign corporations doing business in the state and ensuring they contribute fairly towards public expenses.