In the case of People of the State of New York upon the Relation of The New York Central and Hudson River Railroad Company v. Miller, 1905, the U.S Supreme Court ruled in favor of The New York Central and Hudson River Railroad Company. This dispute arose when a tax assessment was levied on franchise rights granted to railroads by the state government. The railroad company argued that this taxation was unconstitutional as it violated their contract with the state which exempted them from such taxes. They contended that they should only be taxed based on real estate property value rather than including intangible assets like franchise rights into account for taxation purposes. Agreeing with these arguments, Justice Brewer delivered an opinion stating that franchises were not taxable under existing laws unless explicitly mentioned in contracts between corporations and states.

The dissenting opinion in the case of People of the State of New York upon the Relation of The New York Central and Hudson River Railroad Company v. Miller argued that it was unconstitutional for a state to impose taxes on interstate commerce, which included railroad companies like The New York Central and Hudson River Railroad Company. They believed that such taxation infringed upon federal jurisdiction over interstate commerce as outlined by the Commerce Clause in the U.S Constitution. This view held that states should not have power to directly burden or impede interstate trade through taxation, as this could lead to economic discord among states and disrupt national unity. Furthermore, they contended that if each state were allowed to tax entities involved in interstate commerce at their own discretion, it would create an unfair system where some businesses might be taxed multiple times for conducting business across different states.