The Farm Credit Act of 1933 created various lending institutions, including banks for cooperatives, which are designated as federally chartered instrumentalities of the United States.

[4] The Court rejected further claims by CoBank that they were entitled to immunity under McCulloch v. Maryland, stating that that doctrine was expressly not invoked by Congress in this instance.

Thomas wrote, "Had Congress simply deleted the final sentence of §2134 that limited the exemption while retaining the sentence granting the exemption, we would have no trouble concluding that Congress had eliminated the States’ ability to tax banks for cooperatives.

Short of this act, however, we find Congress’ silence insufficient to disrupt the 50-year history of state taxation of banks for cooperatives.

"[4] With this decision, the Missouri Supreme Court had erred in finding an exemption, and the case was remanded to them to alter their previous determination.