In the case of Ohio v. Helvering, Commissioner of Internal Revenue et al., 1933, the U.S Supreme Court was tasked with determining whether a tax imposed by Congress on intangible property held by non-residents violated constitutional principles. The State of Ohio challenged a federal law that required non-residents to pay taxes on intangible properties such as stocks and bonds issued by corporations within the state but owned by individuals residing outside it. The court ruled in favor of Helvering, upholding the constitutionality of this taxation practice under Congress's broad power to levy taxes provided for in Article I Section 8 Clause 1 (the Taxing and Spending Clause) of the Constitution. This decision affirmed that states could not shield their securities from federal taxation merely because they were exempted from state-level taxation.

In the dissenting opinion for Ohio v. Helvering, it was argued that the federal government did not have the constitutional authority to tax income derived from state and municipal bonds. The dissenters believed this taxation violated principles of intergovernmental tax immunity and infringed upon states' rights to manage their own finances without federal interference. They contended that such a power could potentially be used by the federal government as a tool of coercion against states, undermining their sovereignty. Furthermore, they pointed out inconsistencies in exempting certain types of interest-bearing securities while taxing others, which they saw as arbitrary and unfair treatment under law.