In the 1932 case Guaranty Trust Co., Executor, v. Blodgett, Tax Commissioner, the U.S Supreme Court addressed a dispute over estate tax law. The plaintiff was an executor of an estate that included stocks in foreign corporations and argued these assets should not be subject to Massachusetts state taxation because they were located outside of the country. However, Massachusetts had imposed taxes on these assets based on their ownership by a resident decedent at death. The court ruled against the plaintiff and upheld Massachusetts' right to levy such taxes. It reasoned that while physical property may escape local jurisdiction if it is situated abroad, intangible personal properties like corporate stock do not enjoy this immunity as they are considered within control of their owner regardless of location.

In the dissenting opinion for Guaranty Trust Co., Executor, v. Blodgett, Tax Commissioner (1932), Justice Stone argued that the majority's decision was inconsistent with previous rulings of the Court and violated principles of federalism. He contended that a state has every right to tax its residents on their entire net income, regardless of where it is sourced from - in this case, securities located outside Massachusetts but owned by a resident within it. The justice believed that such taxation does not interfere with interstate commerce or infringe upon any constitutional provision; rather it falls under states' rights to levy taxes as they see fit for revenue purposes. Furthermore, he criticized the majority’s reliance on legal technicalities over practical realities when determining whether an asset had sufficient connection to a state for taxation purposes.