San Mateo County v. Southern Pacific Railroad Company was a United States Supreme Court case that addressed the issue of taxation of railroad property. The case was brought by San Mateo County, California, which sought to tax the Southern Pacific Railroad Company for its property located within the county. The railroad argued that the taxation was unconstitutional, as it violated the Commerce Clause of the United States Constitution. The Supreme Court held that the taxation was constitutional, as the railroad was not engaged in interstate commerce. The Court reasoned that the railroad was a local business, and thus subject to local taxation. The Court further held that the taxation did not interfere with interstate commerce, as the railroad was not engaged in interstate commerce. The Court's decision established that local governments may tax railroad property, even if the railroad is not engaged in interstate commerce. This decision has been cited in numerous subsequent cases, and has been used to support the taxation of other businesses, such as airlines and telecommunications companies.

In San Mateo County v. Southern Pacific Railroad Company, the Supreme Court was asked to decide whether a county in California could tax railroad companies for their property located within its borders. The majority opinion held that the state of California had already taxed this property and thus it could not be double-taxed by the county as well. Justice Field dissented from this decision, arguing that since Congress had granted counties in California authority to levy taxes on railroads operating within their boundaries, they should have been allowed to do so here. He argued that while states may have certain powers over taxation, these powers are limited when it comes to taxing entities such as railroads which operate across multiple states and are subject to federal regulation; therefore local governments should still be able retain some control over how much they can tax them without interference from higher levels of government.