In the 1938 case Montana Ex Rel. Board of County Commissioners v. Bruce, County Assessor, et al., the U.S Supreme Court ruled in favor of a county assessor who had been sued by his state for assessing taxes on lands held in trust by the United States for Native American tribes. The court found that while federal law exempted these lands from taxation, it did not prevent states from taxing improvements made to them or personal property located on them. Therefore, although the land itself was tax-exempt due to its status as tribal trust land under federal jurisdiction and protection, any buildings or other structures erected upon it were subject to local and state taxation laws.

In the dissenting opinion for Montana ex rel. Board of County Commissioners v. Bruce, it was argued that the majority's decision to allow a county assessor to tax federal land leased by private individuals or corporations contradicted previous rulings and interpretations of the Constitution. The dissenting justices believed that this ruling could potentially undermine federal authority over its own property, as it would subject federally owned lands to state taxation whenever they are leased out for private use. They also expressed concern about potential conflicts between state and federal authorities regarding control over these properties, which might arise from differing interests in their management and conservation efforts.