In the case of McCurdy, County Treasurer of Osage County, Oklahoma v. United States (1917), the Supreme Court ruled in favor of the federal government's right to tax lands held by Native American tribes. The dispute arose when Osage County attempted to levy taxes on land owned by members of the Osage Tribe that had been allotted and patented under a 1906 Act of Congress. The county argued that once these lands were allotted and patented, they became subject to state taxation laws. However, the court disagreed with this interpretation and found that while individual tribe members could sell or lease their allotments as private property owners would do so, it did not mean those properties lost their status as Indian Country for purposes related to jurisdictional issues such as taxation rights. Therefore, because these lands remained part of Indian Country even after being allotted and patented under federal law; they were immune from state taxation without explicit Congressional authorization.

In the dissenting opinion for McCurdy v. United States, Justice Holmes disagreed with the majority's interpretation of the Osage Allotment Act of 1906. He argued that Congress intended to treat oil and gas rights as part of the surface estate, not a separate mineral estate. Therefore, he believed that these rights should pass directly to heirs upon death without being subject to federal inheritance taxes. Furthermore, he contended that this interpretation was consistent with Oklahoma law at the time which did not recognize separate estates in minerals and surface land until later court decisions changed this understanding. Thus, according to him, it was incorrect for the Court to retroactively apply these changes in state law when interpreting a federal statute passed before such developments occurred.