In 1816, Congress came together to create the Second Bank of the U.S. Their purpose was to handle money transactions for the federal government. The feds tried to open up another branch in Maryland and that was when problems occurred. A law was passed that said they had to pay a tax in order to keep it open. The head of the branch, James McCulloch refused to pay that tax.

The case was trying to decide if it was unconstitutional for Congress to open a Second Bank and if they had the powers to do so, also if the states could have the power to tax branches of the federal government.