The U.S. Supreme Court case Watson et al., Executors of Watson, v. State Comptroller of the State of New York in 1920 revolved around a dispute about inheritance tax law. The late James S. Watson had left his estate to various beneficiaries, including charitable organizations and individuals residing outside the United States. The state comptroller imposed an inheritance tax on these bequests which was contested by the executors of Mr.Watson's will who argued that such taxation violated both federal and state constitutions as well as international treaties between US and foreign countries where some beneficiaries resided. However, the Supreme Court upheld New York's right to impose this tax stating that it did not violate any constitutional or treaty provisions since it was levied before distribution took place i.e., while still part of decedent’s estate within jurisdictional reach of NY authorities rather than being directly imposed upon foreign legatees/beneficiaries themselves after they received their inheritances abroad.

In the dissenting opinion for Watson et al., Executors of Watson, v. State Comptroller of the State of New York, Justice McReynolds disagreed with the majority's decision to uphold a tax on securities held by non-residents in safe deposit boxes within New York. He argued that this was an unconstitutional imposition on interstate commerce and violated due process rights under the Fourteenth Amendment. According to him, these securities were not physically present in New York but rather represented obligations from other states or countries; therefore, they should not be subject to taxation by New York state merely because they are stored there temporarily for safety reasons. Furthermore, he contended that such a tax could lead to multiple taxation issues if every state where these securities might be temporarily located decided to impose similar taxes.