In the case of Keeney v. Comptroller of the State of New York (1911), the U.S. Supreme Court ruled in favor of the state, upholding its right to tax a non-resident's estate that included stocks and bonds from corporations within New York. The plaintiff, an administrator for an estate based in Connecticut, argued that such taxation was unconstitutional as it violated due process rights under Fourteenth Amendment by imposing taxes on property outside its jurisdiction. However, the court disagreed stating that since these securities were essentially obligations owed by corporations operating within New York’s borders and thus subject to its laws; they could be considered as having a "situs" or location for tax purposes within New York even though their owner resided out-of-state.

In the dissenting opinion for Keeney v. Comptroller of the State of New York, it was argued that a state's power to tax should not extend to federal government employees' salaries. The dissenters believed this taxation constituted an infringement on federal sovereignty and could potentially lead to states exerting undue influence over federal operations. They contended that if states were allowed such taxing powers, they might use them as a tool against unpopular or controversial federal policies by imposing heavy taxes on their implementers - thus indirectly affecting policy implementation itself. This view held that allowing state taxation of federally appointed officials would blur the lines between state and national authority, undermining the balance established in the Constitution.