In Shaffer v. Howard, Auditor of the State of Oklahoma et al., 1918, the U.S. Supreme Court dealt with a dispute over taxation on Indian lands in Oklahoma. The plaintiff, Shaffer, was an enrolled member of the Choctaw tribe who owned allotted lands within his tribal boundaries and argued that these lands were exempt from state taxation under federal law and treaties between his tribe and the United States government. The defendants included various officials from Oklahoma who sought to impose property taxes on these lands. In its decision, the court ruled against Shaffer stating that upon dissolution of tribal governments in Oklahoma as part of a process towards statehood for this territory (under Curtis Act), former Indian territories became subject to state laws including those related to taxation unless specifically exempted by Congress - which they had not been in this case.

In the dissenting opinion for Shaffer v. Howard, it was argued that the majority's decision to uphold Oklahoma's tax on intangible property held outside of the state by its residents violated principles of federalism and interstate commerce. The dissent contended that a state should not have jurisdiction over property located beyond its borders, as this would infringe upon other states' rights and potentially lead to double taxation. They also expressed concern about potential conflicts between states if they all claimed taxing authority over their residents' out-of-state properties. Furthermore, they disagreed with the majority's view that physical presence is not necessary for a state to exercise taxing power; instead, they believed such power should be limited by due process requirements which necessitate some form of tangible connection or nexus between a taxpayer and a taxing jurisdiction.