In the case of Mellon Company v. McCafferty, County Treasurer in 1915, the U.S. Supreme Court ruled on a dispute involving taxation laws and their application to bonds owned by non-residents but held within Pennsylvania state borders. The Mellon Company argued that taxing these bonds was unconstitutional as it violated due process rights under the Fourteenth Amendment because they were not physically present in Pennsylvania when taxed. However, the court disagreed with this argument stating that since these bonds were secured and payable within Pennsylvania's jurisdiction, they could be subjected to local tax laws regardless of where their owners resided at any given time. Therefore, it upheld the constitutionality of such taxes concluding that physical presence is not always necessary for property to be taxable by a state.

In the dissenting opinion for Mellon Company v. McCafferty, County Treasurer, Justice Holmes disagreed with the majority's decision to invalidate a Pennsylvania law that taxed corporations based on their capital stock value. He argued that there was no constitutional issue with this tax as it did not infringe upon any federal power or violate due process rights. The justice contended that states should have the right to determine their own methods of taxation and believed it was inappropriate for the Supreme Court to interfere in such matters unless absolutely necessary. Furthermore, he suggested that if every state tax law were subjected to scrutiny by federal courts, it would lead to an untenable situation where these courts would essentially become "a perpetual censor" over state legislation - a role they were never intended nor equipped to play.