In 1867, a Nevada statute imposed a $1 tax on every person leaving the state by railroad, stage coach, or other vehicles engaged or employed in the business of transporting passengers for hire.

The people of the United States constituting one nation, a State may not impose a tax on a person for the "privilege" of traveling from or for passing through it.

The tax was not a prohibited impost, and precedent from Cooley v. Board of Wardens[2] was cited to show that a tax "does not itself institute any regulation of commerce of a national character...." The Court also used precedent from McCulloch v. Maryland[3] to show it is the very presence of the tax that is unconstitutional, not how much of a burden it is: "But if the government has these rights on her own account, the citizen also has correlative rights.

Chief Justice Chase and Justice Clifford concurred by basing their reasoning on the Commerce Clause of the Constitution.

They claimed that the tax impeded interstate commerce.