The Swiss Oil Corporation v. Shanks case in 1926 revolved around the issue of taxation on oil and gas leases. The Supreme Court ruled in favor of the Swiss Oil Corporation, stating that Kentucky's tax law was unconstitutional as it violated the Fourteenth Amendment's due process clause. The state had imposed a tax on gross production from oil and gas wells without allowing deductions for operating expenses or capital invested, which resulted in some instances where taxes exceeded net income. This was deemed unfair by the court because it did not take into account whether there were any profits made from these operations before imposing a tax obligation.

In the dissenting opinion for Swiss Oil Corporation v. Shanks, it was argued that the majority's decision to uphold Kentucky's tax on oil production as a legitimate exercise of state power was incorrect. The dissent emphasized that this taxation constituted an undue burden on interstate commerce and thus violated the Commerce Clause of the U.S Constitution. They believed that since oil is a commodity in national demand and its price is determined by market forces beyond any single state’s control, taxing its extraction would inevitably impact interstate trade negatively. Furthermore, they contended that such taxes could lead to retaliatory measures from other states which would further disrupt commerce among states - something expressly prohibited by federal law under the Commerce Clause.