In the 1901 case of New York Central Railroad Company v. New York, the U.S. Supreme Court ruled in favor of the state of New York, upholding its right to impose taxes on railroad companies operating within its borders. The court held that a tax levied by a state on an interstate commerce corporation was not necessarily unconstitutional as long as it did not interfere with or control interstate commerce and was imposed for services rendered by the state. In this case, New York had taxed the railroad company based on its property value within the state's jurisdiction which included tangible assets like tracks and stations but also intangible ones such as franchises rights granted by local governments to operate there. The court rejected arguments from NY Central Railroad that these franchise rights were exempt from taxation because they derived directly from federal law or constitutionally protected contracts.

The dissenting opinion in the case of New York Central Railroad Company v. New York argued that the majority's ruling was a departure from established legal principles and precedent. The dissent contended that it was not within the power of a state to impose upon a railroad company, without its consent, an obligation to construct and maintain for all time an expensive bridge over navigable waters as part of its roadbed. They believed this constituted taking private property for public use without just compensation, which is prohibited by the Constitution. Furthermore, they asserted that such imposition could potentially lead to abuse by states imposing burdensome obligations on corporations or individuals under guise of regulation when it actually amounts to confiscation. The dissenters maintained that while states have broad powers in regulating businesses affecting public interests like railroads, these powers are not unlimited and must be exercised reasonably with due regard for rights of property owners involved.