In the case of Moore v. Mitchell, the U.S. Supreme Court in 1929 dealt with a dispute over inheritance tax laws in Indiana. The plaintiff, Moore, was the treasurer of Grant County and argued that certain shares of stock should be subject to state inheritance taxes under Indiana law. The defendants were executors for an estate that included these stocks which had been transferred to a trust before death occurred. They contended that this transfer removed them from being part of the taxable estate upon death as per federal law at that time. The court ruled against Moore stating that while states have broad powers to levy taxes within their jurisdiction, they cannot impose such on property located outside their borders or beyond their control - extraterritoriality principle applies here too; hence it would violate due process rights if done so without proper justification or reasonableness test applied beforehand (which wasn't met by Indiana's statute). Therefore, since those stocks were held by New York trustees and not directly owned by deceased person at his demise moment - they weren't liable for any local taxation purposes according to this ruling.

In the dissenting opinion for Moore v. Mitchell, Justice Stone argued that the majority's decision to allow a state to tax federal bonds was inconsistent with previous rulings and threatened the supremacy of federal law. He maintained that such taxation interfered with the functioning of government operations by affecting its borrowing power. Furthermore, he contended that this ruling could potentially lead states to impose taxes on other forms of federal property or activities, thereby undermining national sovereignty and creating conflicts between state and federal authorities. In his view, only Congress should have the authority to decide whether its obligations are subject to state taxation.