In R. J. Reynolds Tobacco Co. v. Durham County, North Carolina et al., the U.S Supreme Court ruled in favor of R.J Reynolds Tobacco Company, overturning a decision by the North Carolina Supreme Court that had upheld an ad valorem tax imposed on its exported goods stored in foreign trade zones (FTZs). The court held that such taxation was inconsistent with federal law and policy which aimed to stimulate international commerce by exempting from state and local taxes goods destined for exportation but temporarily stored in FTZs before shipment overseas. The ruling clarified that states cannot impose property taxes on inventory located within federally designated foreign trade zones if those products are intended for export outside the United States.

In the dissenting opinion for R.J. Reynolds Tobacco Co. v. Durham County, North Carolina et al., Justice Brennan disagreed with the majority's interpretation of a federal statute that exempted "exported" goods from state taxation. He argued that Congress intended to protect only those goods which had actually left the United States and not merely been sold for export, as was the case with Reynolds' tobacco products stored in an overseas warehouse but still within U.S jurisdiction. Brennan contended that this misinterpretation allowed corporations to avoid taxes by simply designating domestic warehouses as 'export zones', undermining states' ability to levy necessary revenue and unfairly shifting tax burdens onto other taxpayers who could ill afford it.