In the case of Louisville and Nashville Railroad Company v. Kentucky in 1901, the U.S Supreme Court ruled on a dispute involving taxation laws. The state of Kentucky had imposed taxes on the railroad company's franchise, which included its right to operate as well as its tangible property such as tracks and equipment. The railroad company argued that this was double taxation since it was already paying taxes on its physical properties separately from its franchise tax. However, the court upheld Kentucky’s law stating that while franchises are indeed considered property under federal law for purposes of due process and equal protection clauses, they can be classified differently under state law for tax purposes if there is no discrimination involved against interstate commerce or any violation of constitutional rights. Therefore, both types of taxes could coexist without constituting double taxation.

In the dissenting opinion for Louisville and Nashville Railroad Company v. Kentucky, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the court regarding interstate commerce. He contended that a state could not impose taxes on property used exclusively in interstate commerce without violating federal law. In this case, he believed that Kentucky’s tax on railroad cars moving through its territory constituted an unlawful burden on such commerce. Furthermore, he disagreed with the majority's view that these railcars were part of a company’s capital stock within Kentucky and thus taxable by it; instead, he maintained they should be considered as engaged solely in interstate transportation due to their constant movement across state lines. Therefore, according to him, they fell under federal jurisdiction rather than being subject to taxation by individual states.