Hylton, plaintiff in error, brought a case against the United States to challenge the constitutionality of an act that imposed a tax on carriages. The Supreme Court held that Congress had exceeded its authority under Article I of the Constitution by imposing this direct tax without apportionment among states according to their population. This decision established two important principles: firstly, it confirmed that Congress could not impose taxes directly upon individuals; and secondly, it affirmed the principle of judicial review as part of constitutional interpretation. In addition to these precedents set by Hylton v United States (1796), Chief Justice John Marshall's opinion also provided insight into how federalism should be interpreted and applied in practice. Ultimately, this landmark ruling helped shape our understanding of taxation powers granted to Congress under Article I and further cemented judicial review as an essential element for interpreting constitutional law.

In Hylton v. United States, the Supreme Court was asked to decide whether a federal tax on carriages for hire imposed by Congress was constitutional. The majority of justices held that it was, finding that the power to lay and collect taxes is an implied power under Article I of the Constitution and thus not limited by other provisions in the document. Justice Paterson dissented from this opinion, arguing that such a tax would be unconstitutional because it did not fall within any of Congress's enumerated powers listed in Article I or elsewhere in the Constitution. He argued further that if such taxation were allowed without limitation then there would be no limit to what could be taxed and thus no protection against oppressive taxation upon citizens' property rights as guaranteed by both state constitutions and common law principles.