In the 1898 case of Henderson Bridge Company v. Henderson City, the U.S. Supreme Court ruled in favor of the city, upholding its right to impose taxes on a bridge owned by the Henderson Bridge Company. The company had argued that it was exempt from taxation because it had been chartered by Congress and Kentucky's state legislature to build and operate a toll bridge over Ohio River between Indiana and Kentucky. However, after examining previous cases regarding similar issues, as well as considering both federal law and state law under which this corporation was created, the court concluded that there were no provisions preventing local authorities from taxing property belonging to such corporations within their jurisdictional limits for local purposes unless expressly forbidden by statute or constitutional provision.

In the dissenting opinion for Henderson Bridge Company v. Henderson City, it was argued that the majority's decision to uphold a tax imposed by the city of Henderson on the bridge company was incorrect. The dissenting justices believed that this tax violated an agreement made between Kentucky and Indiana when they jointly authorized construction of a bridge over Ohio River. They contended that this authorization constituted a contract which could not be impaired under Article I, Section 10 of U.S Constitution (the Contract Clause). Furthermore, they asserted that since both states had agreed to exempt from taxation any property necessary for operation and maintenance of said bridge, imposing such taxes would infringe upon interstate commerce regulation - an exclusive right reserved for Congress as per Commerce Clause in U.S Constitution. Thus, according to them, local governments should not have authority to levy taxes on properties involved in interstate commerce without explicit consent from Congress or unless specifically permitted by federal law.