The U.S. Supreme Court case Schuylkill Trust Co. v. Pennsylvania in 1935 revolved around the constitutionality of a state tax law that was imposed on the transfer of property from estates to corporations, where these corporations were acting as trustees for beneficiaries who resided outside of Pennsylvania. The Schuylkill Trust Company argued that this taxation violated both the Due Process Clause and Commerce Clause of the Constitution by unfairly taxing interstate commerce and transactions occurring entirely within another state's jurisdiction. However, in its decision, the Supreme Court upheld Pennsylvania’s right to impose such taxes. It ruled that there was no violation against either clause because it wasn't an attempt to regulate or burden interstate commerce but rather a legitimate exercise by a state to tax economic benefits enjoyed under protection given by its laws - i.e., transferring assets into trust within their borders regardless if beneficiaries lived out-of-state.

In the dissenting opinion for Schuylkill Trust Co. v. Pennsylvania, Justice Stone argued that the majority's decision to uphold a state tax on federal securities held by a resident trust company was inconsistent with previous rulings of the Court and violated principles of intergovernmental tax immunity. He contended that such taxation could potentially interfere with federal borrowing power and thus should be considered unconstitutional under Supreme Court precedent established in Pollock v. Farmers' Loan & Trust Co., which had invalidated an income tax on interest from U.S government bonds as an impermissible direct tax without apportionment among states according to population. Furthermore, he pointed out inconsistencies between this case and other cases where taxes were struck down because they indirectly burdened federal functions or instrumentalities, arguing there was no principled basis for distinguishing those situations from this one.