The U.S. Supreme Court case Worcester County Trust Co. v. Riley, Controller of California et al., 1937, revolved around the issue of taxation on intangible property held by a non-resident trustee in Massachusetts for beneficiaries residing in California. The State of California imposed an inheritance tax on the transfer to beneficiaries living within its jurisdiction upon the death of one beneficiary and substitution with another from outside the state. The plaintiff argued that this was unconstitutional as it violated due process rights under Fourteenth Amendment because neither trust nor trustees had any connection with California except for residence status of some beneficiaries. However, after reviewing previous rulings and considering principles related to domicile-based taxation, interstate commerce clause and full faith & credit clause; the court upheld constitutionality of such taxes by states where only relation is residency status or benefit enjoyed by residents through such trusts even if they are managed out-of-state. This decision clarified that a state can impose taxes based on benefits conferred upon its residents irrespective of location or management control over assets involved; thus setting precedent for future cases involving similar issues.

In the dissenting opinion for Worcester County Trust Co. v. Riley, Justice Cardozo disagreed with the majority's ruling that California could not tax intangible personal property held by a Massachusetts trustee for beneficiaries who were residents of California. He argued that the state should have jurisdiction to tax its own residents on their income and assets, regardless of where those assets are physically located or managed. He believed this was especially true in cases like this one, where there was no dispute about who owned the property or how it would be distributed among beneficiaries. In his view, allowing states to impose such taxes did not interfere with interstate commerce or violate any constitutional principles; rather, it simply recognized each state's sovereign right to raise revenue from its own citizens.