In the 1942 case of Michigan et al. v. United States, the Supreme Court ruled on a dispute over tax jurisdiction between states and Native American tribes. The state of Michigan had imposed a gasoline tax on fuel sold to tribal members living within reservation boundaries, arguing that it was not infringing upon tribal sovereignty because the tax fell on off-reservation activities (the importation and sale of gasoline). However, the court disagreed with this argument. It held that while states have broad powers to levy taxes, they cannot do so in ways that interfere with federal government functions or policies - in this case, its relationship with Native American tribes as defined by treaties and statutes. The court found that imposing such a tax would effectively allow states to undermine these federal protections for tribes by taxing any goods or services coming onto reservations from outside sources – something Congress clearly did not intend when it established those protections. Therefore, the court concluded that Michigan's gas tax could not be applied to sales made directly to tribe members living on their own reservations.

In the dissenting opinion for Michigan et al. v. United States, Justice Frank Murphy argued that the federal government did not have jurisdiction over state-owned liquor stores under the Webb-Kenyon and Wilson Acts. He contended that these acts were designed to protect states' rights in regulating alcohol within their borders, rather than to provide a means for federal interference in state affairs. Furthermore, he asserted that allowing such federal intervention would undermine states' ability to control and regulate liquor sales as they saw fit - a power granted by the 21st Amendment of the Constitution which ended prohibition. In his view, this case represented an unwarranted expansion of federal authority at expense of state sovereignty.