In the case of National Bank v. Commonwealth, the Supreme Court of the United States was asked to decide whether a state could tax a national bank. The case arose when the Commonwealth of Pennsylvania attempted to impose a tax on the National Bank of Pittsburgh. The National Bank argued that the tax was unconstitutional because it violated the Supremacy Clause of the United States Constitution. The Supreme Court held that the tax was unconstitutional because it interfered with the exclusive power of Congress to regulate the national banking system. The Court reasoned that the power to tax is the power to destroy, and that the tax imposed by the Commonwealth of Pennsylvania would have a detrimental effect on the national banking system. The Court also held that the tax was unconstitutional because it violated the Contract Clause of the United States Constitution, which prohibits states from impairing the obligations of contracts. The Court's decision in National Bank v. Commonwealth established the principle that states cannot tax national banks. This principle has been reaffirmed in subsequent cases, and it remains an important part of the law today.

In National Bank v. Commonwealth, the Supreme Court was tasked with determining whether a state could tax national banks in its jurisdiction. The majority opinion held that states were not allowed to do so because it would interfere with Congress’s power to regulate such institutions under the Constitution. However, Justice Field dissented from this ruling and argued that while Congress had exclusive authority over national banks, it did not have exclusive control of taxation within each state's borders. He further contended that if states were prevented from taxing these entities then they would be unable to raise revenue for public purposes or protect their citizens against fraud and abuse by those same organizations. Ultimately, he concluded that allowing states to impose taxes on national banks was necessary in order for them to fulfill their constitutional duties as governments without interference from federal authorities.