In the case of Puget Sound Power & Light Company et al. v. County of King et al., 1923, the U.S Supreme Court ruled in favor of Puget Sound Power & Light Company and other utility companies against King County, Washington State. The dispute arose when the county attempted to tax power lines that crossed over public lands under a federal license granted by Congress through an act passed in 1891. The utility companies argued that this was unconstitutional as it violated their rights under the Commerce Clause and Supremacy Clause of the US Constitution because they were operating on federally controlled land with congressional approval. They contended that only Congress had jurisdiction to impose such taxes or fees for use of these lands, not local governments like counties or states. The court agreed with them stating that while states have broad powers to levy taxes within their boundaries, they cannot interfere with federal operations or property without explicit permission from Congress.

In the dissenting opinion for Puget Sound Power & Light Company et al. v. County of King et al., Justice McReynolds disagreed with the majority's ruling that a state law allowing counties to tax power companies based on their gross income was constitutional. He argued that this taxation method unfairly burdened interstate commerce, as it did not take into account whether the income was derived from in-state or out-of-state activities. Furthermore, he contended that such a tax could lead to multiple states taxing the same income, thereby creating an undue burden on businesses involved in interstate commerce and potentially discouraging such activity altogether. Therefore, according to Justice McReynolds' view, this form of taxation violated both due process and equal protection clauses under Fourteenth Amendment.