In the 1924 case of Law v. United States, the Supreme Court ruled on a matter concerning inheritance tax law. The appellant, Mrs. Law, was a British subject residing in England who inherited property from her brother located in Illinois and Washington D.C., USA. She argued that she should not be liable for American inheritance taxes as she was neither an American citizen nor resident at the time of her brother's death; however, U.S authorities insisted otherwise. The Supreme Court held that regardless of citizenship or residency status, anyone inheriting property within U.S borders is subject to its taxation laws - including inheritance tax. They reasoned this by stating that it is within every sovereign state’s right to regulate their own internal affairs without interference from external entities – which includes determining how they levy taxes on properties situated within their jurisdiction. This ruling affirmed the principle that all property located in America falls under its legal purview and thus can be taxed accordingly by its government irrespective of where beneficiaries reside or hold citizenship.

In the dissenting opinion for Law v. United States, Justice McReynolds argued that the majority's decision to uphold a federal law prohibiting transportation of liquor into "dry" states violated state sovereignty and exceeded Congress' power under the Commerce Clause. He contended that while Congress has authority over interstate commerce, it does not have unlimited power to regulate all aspects of goods transported across state lines. In his view, once alcohol had arrived in its destination state and was no longer part of interstate commerce, it fell under local jurisdiction - thus making any federal prohibition on its transport an infringement upon states' rights. Furthermore, he believed this ruling set a dangerous precedent by allowing Congress to potentially control other commodities or activities within individual states simply because they might affect interstate commerce indirectly.