A more thorough explanation:

Toll v. Moreno is a legal case that was decided by the United States Supreme Court in 1979. The case involved a policy at the University of Maryland that denied "in-state" status to domiciled non-immigrant G-4 aliens and their dependents. The Supreme Court held that this policy was invalid under the Supremacy Clause of the U.S. Constitution.

For example, the University of Maryland had a policy of granting preferential treatment for the purposes of tuition and fees to students with "in-state" status. The policy excluded nonimmigrant aliens. When the University relied on this policy to deny in-state tuition to respondent students who were G-4 dependents residing in the state, the respondents filed a class action against the University of Maryland and its President, seeking declaratory and injunctive relief.

The Supreme Court found that the state policy, as applied to the G-4 aliens and their dependents, violated the supremacy clause. The Court emphasized that the federal government has broad constitutional authority in determining which aliens should be admitted to the United States through the power to establish a Uniform Rule of Naturalization, to regulate commerce with foreign nations, and to regulate foreign affairs. By contrast, the states do not.

Therefore, when a state regulation discriminates against aliens lawfully admitted to the country and imposes additional burdens not contemplated by Congress, that regulation is impermissible. Congress had allowed G-4 aliens, employees of various international organizations and their immediate families, to enter the country on terms permitting them to establish domicile in the United States. The federal government had also afforded these G-4 visa holders tax exemption to serve as inducement for these immigrants. The clarifying resolution, however, justified the policy based on the "dollar differential" at stake from the respondents' parents not paying taxes. Therefore, the majority found that the University's "in-state" policy frustrated Congress's purpose and was therefore impermissible.