In National Bank v. County of Yankton, the Supreme Court of the United States was asked to decide whether a county could tax a national bank. The case arose when the County of Yankton attempted to levy a tax on the National Bank of Yankton. The National Bank argued that the tax was unconstitutional because it violated the National Bank Act of 1864, which prohibited states from taxing national banks. The Supreme Court held that the County of Yankton could not tax the National Bank of Yankton. The Court reasoned that the National Bank Act of 1864 was intended to protect national banks from state taxation, and that the County of Yankton was a subdivision of the state and thus subject to the same restrictions. The Court also noted that the National Bank Act of 1864 was intended to create a uniform system of taxation for national banks, and that allowing the County of Yankton to tax the National Bank of Yankton would undermine this uniformity. The Court concluded that the County of Yankton could not tax the National Bank of Yankton, and that the National Bank Act of 1864 prohibited such taxation. The Court's decision established that national banks are exempt from state and local taxation, and that the National Bank Act of 1864 is the source of this exemption.

Justice Field delivered the dissenting opinion in National Bank v. County of Yankton, arguing that the majority's decision was contrary to both precedent and sound public policy. He argued that a state cannot tax an instrumentality of the federal government without its consent, as it would be tantamount to taxation by one sovereign upon another. Furthermore, he noted that Congress had not authorized such taxation on national banks; if they wished for states to have this power over them then they should pass legislation allowing it. Justice Field also pointed out that while some may argue against his position due to potential revenue losses for local governments, there are other ways for them to raise money which do not involve taxing entities created by Congress or infringing upon their powers granted under Article I Section 8 of the Constitution. Finally, he concluded with a warning about how dangerous it could be if states were allowed unchecked authority over federally-created institutions like national banks: “The result would be disastrous alike to commerce and finance throughout our country”