In the case of Minnesota v. First National Bank of St. Paul (1926), the U.S Supreme Court ruled in favor of Minnesota, upholding its right to tax national banks based on their capital and surplus funds without violating federal law or infringing upon federal jurisdiction. The First National Bank had argued that such taxation was unconstitutional as it interfered with a federally chartered institution's operation, but the court disagreed. It held that while states could not directly tax a bank’s operations which were under federal control, they could levy taxes indirectly through taxing property or income associated with those operations - in this case, capital and surplus funds.

The dissenting opinion in the case of Minnesota v. First National Bank of St. Paul argued that the majority's decision was a departure from established precedent regarding taxation and interstate commerce. The dissent contended that by allowing Minnesota to tax a national bank for its ownership of out-of-state bonds, the court had effectively permitted double taxation, as those bonds could also be taxed by their state of origin. This, they argued, violated principles against undue burdens on interstate commerce and infringed upon federal authority over such matters. Furthermore, it was suggested that this ruling would create uncertainty and instability in financial markets due to potential variations in state tax policies towards these types of securities held by banks or other entities.