In the 1907 case of Jetton, Revenue Agent of the State of Tennessee v. University of the South, the Supreme Court was tasked with determining whether or not a state could tax property owned by an out-of-state corporation that was used for educational purposes within its borders. The University of the South, chartered in Georgia but operating primarily in Tennessee, argued that it should be exempt from taxation under both states' laws regarding charitable and educational institutions. However, Tennessee's revenue agent disagreed and sought to impose taxes on university-owned lands leased to third parties for profit-making activities unrelated to education. Ultimately, after considering prior rulings related to interstate commerce and corporate rights as well as specific provisions in each state's constitution and statutes about tax exemptions for schools and charities, the court sided with the university. It held that while states have broad power over taxation within their territory they cannot infracate upon constitutional protections against interference with interstate commerce or impairing contracts; thus making such properties immune from taxation.

In the dissenting opinion for Jetton v. University of the South, Justice Harlan argued that the majority's decision to exempt a university from taxation was incorrect and inconsistent with previous rulings. He contended that while educational institutions serve an important public function, they are not inherently governmental entities and should therefore be subject to taxation like any other corporation or private entity. Furthermore, he pointed out inconsistencies in how exemptions were applied; some states granted them while others did not, leading to unequal treatment under law. Harlan also expressed concern about potential abuse of such exemptions by organizations claiming charitable status solely for tax benefits. Overall, his argument emphasized adherence to legal precedent and uniformity in application of tax laws across all types of corporations.