In the United States v. Santa Fe case of 1896, the U.S Supreme Court ruled on a dispute involving taxation and interstate commerce. The city of Santa Fe had imposed a tax on every railroad car that passed through its jurisdiction, including those involved in interstate trade. The Atchison, Topeka & Santa Fe Railway Company challenged this tax as an unconstitutional burden on interstate commerce. In its decision, the Supreme Court sided with the railway company and struck down the local ordinance as violating federal law governing interstate commerce under Article I Section 8 Clause 3 (the Commerce Clause) of the Constitution which gives Congress exclusive power over such matters. This ruling reinforced federal supremacy over state laws in regulating national economic activities.

The dissenting opinion in the United States v. Santa Fe case of 1896 argued that the federal government did not have jurisdiction over lands granted to railroad companies by Congress, and therefore could not impose taxes on those lands. The justices contended that these land grants were made with the intention of aiding in the construction and operation of railroads, which was a matter of public interest. They believed that imposing taxes on these lands would undermine this purpose by placing an additional financial burden on the railroad companies. Furthermore, they asserted that such taxation constituted an interference with interstate commerce, which is regulated exclusively by Congress under the Commerce Clause of Constitution. Therefore, they concluded that state governments do not have authority to tax property owned or used for purposes related to interstate commerce without consent from Congress.