The U.S. Supreme Court case South Utah Mines & Smelters v. Beaver County in 1922 revolved around the issue of taxation on mining claims and properties owned by South Utah Mines & Smelters (SUMS) in Beaver County, Utah. The county had levied taxes on SUMS's unpatented mining claims based on their gross value, which included both surface and subsurface elements such as ore deposits. SUMS argued that this was unconstitutional because federal law only allowed for the taxation of valuable mineral deposits discovered within a claim, not the entire claim itself including its potential undiscovered resources. The Supreme Court ruled against SUMS stating that while federal law did indeed limit what could be taxed within a mining claim to "valuable mineral deposits," it did not prohibit states from taxing other aspects of these claims under state laws if they chose to do so. Therefore, Beaver County's tax assessment was upheld as constitutional since it fell under state jurisdiction.

In the dissenting opinion for South Utah Mines & Smelters v. Beaver County, Justice Holmes argued that the majority's decision was inconsistent with previous rulings of the Court and violated principles of federalism. He contended that a state has every right to tax property within its borders, even if it is owned by an out-of-state entity or individual. In this case, he believed Utah had appropriately taxed mining properties located in Beaver County based on their full value as determined by local authorities. The fact that these mines were operated from outside Utah did not exempt them from taxation according to state law and should not have been grounds for exemption under federal law either. Furthermore, he disagreed with the majority's assertion that such taxes constituted a burden on interstate commerce; instead, they represented legitimate exercises of states' rights to levy taxes within their jurisdictional boundaries.