In which case did the Supreme Court rule that Congress had the power to tax state banks?

The correct answer is found in McCulloch v. Maryland, which established the precedent that Congress has the authority to create a national bank and that states cannot tax it. This landmark case was decided in 1819 and involved a dispute over whether the state of Maryland had the power to tax the Bank of the United States. The Supreme Court, led by Chief Justice John Marshall, ruled that while states have the power to tax, they cannot tax instruments of the federal government employed in the execution of constitutional powers. This reinforced the supremacy of federal laws over state laws and confirmed that Congress has implied powers that extend beyond those explicitly listed in the Constitution. Additionally, the case established the principle of federalism where the federal government can operate independently of state interference.