In the case of Leach, Executor v. Nichols, Formerly Collector of Internal Revenue (1931), the U.S Supreme Court was tasked with determining whether a federal estate tax could be levied on an inheritance that had been left to a widow by her deceased husband. The couple resided in Massachusetts where state law allowed for such transfers to occur without taxation. However, under federal law at the time, inheritances were subject to taxation unless they were specifically exempted by statute. The court ruled in favor of Nichols and upheld the imposition of a federal estate tax on this transfer. They reasoned that while Massachusetts law did not impose taxes on these types of transfers between spouses, it did not have any bearing or influence over how these transactions would be treated under federal law. This decision underscored the principle that states cannot dictate how their laws will interact with or impact existing federal statutes - particularly when it comes to matters related to taxation.

In the dissenting opinion for Leach, Executor v. Nichols, Formerly Collector of Internal Revenue (1931), Justice Stone argued that the majority's interpretation of the tax code was incorrect and overly narrow. He believed that a broader reading of the law would allow for more equitable taxation and better reflect congressional intent. Specifically, he disagreed with the majority's decision to exclude certain types of income from taxation under Section 302(b) of the Revenue Act because they were not explicitly mentioned in its text. Instead, he contended that these forms should be included as part of a taxpayer’s gross income unless specifically exempted by Congress. Furthermore, Justice Stone criticized his colleagues' reliance on technicalities rather than considering legislative purpose or history when interpreting statutes.