In the case of Offutt Housing Co. v. County of Sarpy et al., 1955, the U.S Supreme Court ruled in favor of Offutt Housing Company, a private corporation that leased land from the federal government to provide housing for military personnel and their families at Offutt Air Force Base in Nebraska. The company challenged Sarpy County's decision to tax its property on grounds that it was exempt due to being federally owned and used for public purposes. The court agreed with this argument, citing constitutional immunity principles which protect federal operations from state interference through taxation or regulation. It held that although a private entity was involved, the primary function served by these properties - supporting national defense by providing necessary accommodations for servicemen - made them integral parts of a federal undertaking immune from local taxation.

In the dissenting opinion for Offutt Housing Co. v. County of Sarpy et al., Justice Frankfurter disagreed with the majority's decision that a private corporation, operating on land leased from the federal government, was exempt from local taxation. He argued that this interpretation contradicted previous rulings which held that immunity should not be extended to those who do business with the government but are not part of it themselves. Furthermore, he contended that such an expansive view of immunity could potentially disrupt state and local governments' ability to collect taxes and provide services by creating large tax-exempt areas within their jurisdictions. This would result in unfair burdens being placed on other taxpayers who would have to make up for these lost revenues.