The U.S. Supreme Court case State of New York ex rel. Pennsylvania Railroad Company v. Knight (1903) involved a dispute over taxation between the state of New York and the Pennsylvania Railroad Company, which operated ferries in both states under a subsidiary company named Westcott Express Co. The railroad company argued that it was being unfairly taxed by New York for property located in another state, violating its rights to due process and equal protection under the Fourteenth Amendment. New York had levied taxes on all shares owned by residents regardless of where they were issued or where their issuing companies did business; this included shares held by Westcott's shareholders who resided in New Jersey but whose shares were considered taxable personal property within New York. However, the court ruled against Pennsylvania Railroad Company stating that there was no violation as long as tax laws are applied uniformly without discrimination among taxpayers similarly situated within jurisdictional boundaries set forth by law-making authorities.

In the dissenting opinion for the case of State of New York ex rel. Pennsylvania Railroad Company v. Knight, Justice Harlan argued that the majority's decision was a misinterpretation of both federal and state law regarding taxation. He contended that under existing laws, it was not permissible for states to tax property located outside their jurisdiction or beyond their control - in this case, railroad cars owned by an out-of-state company but operating within New York borders. Furthermore, he disagreed with the majority's view that these taxes were justified as fees for corporate privileges granted by New York State; instead, he saw them as direct taxes on personal property which violated constitutional principles against double taxation and interstate commerce restrictions. In his view, such practices could lead to unfair burdens on businesses and potential conflicts between states over taxing rights.