In the case of Tioga Railroad Company v. Pennsylvania, 1894, the U.S Supreme Court ruled on a dispute regarding taxation by states. The Tioga Railroad Company argued that its property in New York should not be taxed by Pennsylvania because it was outside of their jurisdiction and thus violated the Due Process Clause of the Fourteenth Amendment. However, Pennsylvania contended that since they had incorporated the company within their state boundaries, they held taxing rights over all properties owned by them regardless of location. The court sided with Pennsylvania's argument stating that corporations are creations of state law and as such can be subjected to conditions set forth at creation including taxation laws. It further clarified that while physical properties located out-of-state cannot generally be taxed directly due to jurisdictional limitations; however indirect taxes like franchise or privilege tax based on total value could still apply even if part value comes from out-of-state assets. This decision upheld states' right to tax companies incorporated within their borders for all corporate property irrespective where it is physically situated provided it does not violate other constitutional provisions.

In the dissenting opinion for Tioga Railroad Company v. Pennsylvania, it was argued that the state of Pennsylvania had no right to tax a corporation's capital stock when part of its property is located in another state. The justice contended that such taxation violates the Due Process Clause and Equal Protection Clause under Fourteenth Amendment as it imposes an unfair burden on interstate commerce. Furthermore, he expressed concern over potential double taxation if other states followed suit by taxing corporations based on their total capital without considering where their properties are actually situated. He believed this could lead to serious economic implications and hamper business growth across states lines.