In the case of Posados, Collector, et al. v. City of Manila in 1926, the U.S Supreme Court ruled on a dispute regarding taxation powers between local and national government entities in the Philippines - then a U.S territory. The city of Manila imposed taxes on oil imported by Standard Oil Company which was already taxed by Philippine's Insular Government under an act passed by Congress. The court held that double taxation did not violate due process rights as long as it was clear and unambiguous from legislation that such imposition was intended. It further stated that there is no constitutional prohibition against double taxation in the United States or its territories including Philippines at this time.

In the dissenting opinion for Posados, Collector, et al. v. City of Manila (1926), Justice Oliver Wendell Holmes Jr., joined by Justice Louis Brandeis, argued against the majority's decision to uphold a Philippine law that imposed higher taxes on foreign goods than domestic ones. The justices believed this was in violation of the due process clause and equal protection principles under U.S Constitution’s Fourteenth Amendment. They contended that there was no reasonable basis for such discrimination between local and imported products as it unfairly burdened importers and consumers who preferred foreign goods over local ones. Furthermore, they disagreed with the majority's view that economic or social legislation should be presumed constitutional unless proven otherwise; instead asserting that any discriminatory tax measure must have a clear justification to pass constitutional muster.