In the case of Pierce Oil Corporation v. Hopkins, County Clerk of Sebastian County, Arkansas et al., 1923, the U.S. Supreme Court ruled in favor of Pierce Oil Corporation. The corporation had been assessed for taxes by Sebastian County on oil and gas leases it held in federal lands within the county's jurisdiction. However, these lands were not subject to state taxation under federal law as they were owned by a Native American tribe and held in trust by the United States government. The court found that while states have broad powers to tax property within their borders, this power does not extend to properties which are immune from state control due to being federally-owned or controlled such as tribal reservations or other federally-held land trusts.

In the dissenting opinion for Pierce Oil Corporation v. Hopkins, it was argued that the majority's decision to uphold Arkansas' tax on out-of-state corporations conducting business within its borders violated both due process and equal protection clauses of the Fourteenth Amendment. The dissent emphasized that this taxation unfairly burdened interstate commerce by imposing a higher rate on foreign corporations than domestic ones, thereby creating an unjustifiable distinction between them. It also pointed out that there was no substantial difference in services provided by the state to these two types of entities which could justify such differential treatment. Furthermore, it contended that this discriminatory tax did not serve any legitimate public interest or policy objective but rather seemed designed solely to protect local businesses from outside competition. Therefore, according to the dissenting justices, such a measure should have been struck down as unconstitutional under federal law.