In the case of Thomas, Collector v. Perkins et al., 1936, the U.S. Supreme Court was asked to decide whether a tax imposed by Congress on coconut oil imported from the Philippines violated the Constitution's prohibition against taxing exports from any state. The respondents argued that since the Philippines were under U.S jurisdiction at this time, they should be considered as part of a "state" and thus exempted from taxation according to Article I Section 9 Clause 5 of US constitution which prohibits taxation on exports between states. The court ruled in favor of Thomas (the collector), stating that while it is true that Congress has power over territories such as the Philippines similar to its power over individual states, these territories are not actually considered "states" within meaning and intent behind constitutional provision prohibiting taxes on exportation between states. Therefore, imposing an import tax did not violate any constitutional provisions.

In the dissenting opinion for Thomas, Collector v. Perkins et al., Justice Cardozo disagreed with the majority's ruling that a tax on foreign-built yachts violated the Import-Export Clause of the U.S. Constitution. He argued that this interpretation was too broad and could potentially undermine Congress' ability to levy taxes necessary for raising revenue. According to Justice Cardozo, a yacht is not an import merely because it was built abroad; rather, its status as an import depends on whether it has been brought into this country for purposes of sale or trade. In his view, if a yacht is purchased by an American citizen while abroad and then sailed back to America purely for personal use - as in Mr Perkins' case - it should not be considered an 'import'. Therefore he believed such property should be subject to taxation under domestic law just like any other property owned by citizens within national borders.