In the case of Montana Catholic Missions v. Missoula County in 1905, the U.S Supreme Court ruled that lands held by religious organizations for educational purposes were not exempt from taxation under federal law. The Montana Catholic Missions had claimed an exemption on their property used as a school and hospital, arguing it was being used for religious and charitable purposes. However, the court found that while these activities may be beneficial to society, they did not fall within the scope of "religious worship" as defined by tax laws at that time. Therefore, such properties could be subjected to local taxes just like any other real estate holdings unless specifically exempted by state law.

The dissenting opinion in the Montana Catholic Missions v. Missoula County case argued that the property in question should be exempt from taxation due to its religious and educational use, as per Montana state law. The justice disagreed with the majority's interpretation of what constitutes a "school," arguing that it was too narrow and did not take into account broader definitions used by other states at the time. He also contended that even if some parts of the property were used for non-educational purposes, this shouldn't negate tax exemption for those portions clearly dedicated to schooling or religious instruction. Furthermore, he believed there was insufficient evidence presented to prove any substantial commercial activity on part of mission which could justify taxation under existing laws.