In the Hopkins v. Hebard case of 1914, the U.S. Supreme Court ruled on a dispute involving an inheritance tax law in Vermont. The plaintiff, Hopkins, was a resident of New York who inherited property from his father's estate located in Vermont and challenged the constitutionality of Vermont's inheritance tax law which taxed non-residents at higher rates than residents for real estate properties within its jurisdiction. The court upheld that it is constitutional for states to impose different tax rates on residents versus non-residents as long as they do not violate any specific provisions or principles contained in the Constitution such as due process or equal protection clauses under Fourteenth Amendment. In this particular case, Justice Holmes delivered an opinion stating that there was no violation because all owners were treated equally according to their class (resident vs non-resident), and therefore there was no discrimination against interstate commerce nor deprivation of property without due process.

In the dissenting opinion for Hopkins v. Hebard, Justice Holmes disagreed with the majority's interpretation of a Vermont statute regarding taxation of national bank shares. The majority held that this tax was unconstitutional because it discriminated against national banks in favor of state institutions, violating the National Bank Act. However, Holmes argued that there was no discrimination as both types of banks were taxed similarly under Vermont law - on their net assets rather than gross ones. He believed that if any difference existed between how these taxes were calculated for state and national banks, it arose from federal laws regulating how to value a bank’s capital stock and surplus when assessing its shares' taxable value – not from discriminatory intent or effect by Vermont's legislature. Therefore, he concluded that such differences should be addressed through changes in federal law rather than striking down validly enacted state legislation.