United States Supreme Court Cases & Opinions

U.S. Supreme Court

Alabama v. King & Boozer, 314 U.S. 1 (1941)

Alabama v. King & Boozer

No. 602

Argued October 23, 24, 1941

Decided November 10, 1941

314 U.S. 1

Syllabus

1. No constitutional immunity of the United States from state taxation prevents a State from applying its sales tax to a purchase of building materials by one who buys them for use, and uses them, in performing a "cost-plus" building contract for the Government, although the contract provides that the title to such materials shall vest in the United States upon their delivery, inspection, and acceptance by a Government officer at the building site, and that the contractor shall be reimbursed by the Government for the cost of the materials, including the tax. P. 314 U. S. 8.

(1) The fact that the economic burden of the tax is passed on to the United States does not make it a tax upon the United States. Panhandle Oil Co. v. Knox, 277 U. S. 218, and Graves v. Texas Co., 298 U. S. 393, overruled. P. 314 U. S. 9.

(2) In this case, the legal incidence of the tax was on the contractor, not on the United States; the contractor, in buying the materials, was not the agent or representative of the Government, and the transaction was not such as to place the Government in the role of purchaser. P. 314 U. S. 9.

No question was here raised of the power of Congress to free from state taxation transactions of individuals where the economic burden of the tax is passed on to the United States. P. 314 U. S. 8.

2. Under the Alabama statute here involved (it is conceded and assumed for the purposes of this case), the purchaser of tangible goods, who is subjected to the tax measured by the sales price, is the person who orders and pays for them. when the sale is for cash or who

Page 314 U. S. 2

is legally obligated to pay for them if the sale is on credit, and under the contract here involved, the contractors were to purchase in their own name and on their own credit all the materials required, unless the Government should elect to furnish them, and the Government was not bound by their purchase contracts, but was obligated only to reimburse the contractors when the materials purchased should be delivered, inspected, and accepted at the site. P. 314 U. S. 10.

241 Ala. 557, 3 So.2d 572, reversed.

Certiorari, post, p. 599, to review a decree of the Supreme Court of Alabama which reversed a decision of a state circuit court sustaining a sales tax. The decision of the circuit court was rendered upon an appeal from the assessment. The United States was permitted to intervene.

Page 315 U. S. 6