In the case of Tait, Collector of Internal Revenue v. Western Maryland Railway Co., 1932, the U.S. Supreme Court ruled in favor of Western Maryland Railway Co., stating that a tax imposed by Congress on transportation companies was unconstitutional as it violated the Export Clause. The clause prohibits taxes or duties from being laid on articles exported from any state and ensures free trade among states without interference from federal taxation policies. The railway company had been taxed for transporting coal across state lines to be loaded onto ships for exportation overseas; however, they argued this was an infringement upon their rights under the Export Clause. The court agreed with them and held that such a tax could not be levied against goods intended for exportation.

In the dissenting opinion for Tait v. Western Maryland Railway Co., Justice Stone argued that the majority's decision to exempt certain types of property from taxation was not supported by precedent or sound legal reasoning. He contended that all forms of property, regardless of their nature or use, should be subject to taxation unless explicitly exempted by law. According to him, the court had no authority to create new exemptions based on its own interpretations and assumptions about what constitutes a "direct" tax under the Constitution. Furthermore, he disagreed with the majority's view that taxes on income derived from real estate were essentially direct taxes on the property itself; instead, he saw them as indirect taxes on commercial activity related to such properties.