In the case of McCoach, Collector of Internal Revenue, v. Minehill & Schuylkill Haven Railroad Company (1912), the U.S Supreme Court ruled in favor of the railroad company. The dispute centered around whether or not a tax imposed on corporations by Congress was applicable to this particular railroad company. The court held that although railroads are indeed corporations, they were exempt from this specific tax due to an earlier act passed by Congress which excluded "corporations engaged in transportation". This ruling clarified that such exemptions should be interpreted broadly and inclusively rather than narrowly and exclusively. Therefore, even though the Minehill & Schuylkill Haven Railroad Company did more than just transport goods (such as storing them), it still fell under the exemption category because its primary function was transportation.

The dissenting opinion in the case of McCoach v. Minehill & Schuylkill Haven Railroad Company argued that the tax imposed by Congress on corporations, including railroad companies, was constitutional and should be upheld. The dissenters believed that this tax did not infringe upon any state rights or powers as it was a direct tax on the corporation's income and not an indirect burden on its property or operations within a particular state. They also disagreed with the majority's interpretation of what constituted 'income,' arguing that gross receipts from transportation services could indeed be considered as such under federal law. Furthermore, they contended that even if some aspects of taxation were deemed unconstitutional, it would not necessarily invalidate all other parts of the same act - instead each part should be examined separately for constitutionality.