CONSTITUTIONAL LAW - CONSTITUTIONALITY OF STATE SALES TAX ON DEFENSE MATERIALS PURCHASED UNDER A COST-PLUS-A-FIXED-FEE CONTRACT WITH THE FEDERAL GOVERNMENT

X had a cost-plus-a-fixed-fee contract with the federal government, under which the government reserved the right to pay directly for purchases made by X pursuant to contract to give prior authorization for each purchase over $500, to inspect and acquire title to materials delivered under such contract, and to furnish materials itself. X ordered lumber from plaintiff, who contested the constitutionality of an Alabama sales tax levied on this sale, contending that the tax was levied on a transaction by which the United States secured goods for governmental purposes. Held, the tax should be sustained, since X, and not the government, was legally obligated to pay for the materials, and since X was an independent contractor. Such a tax is not invalid merely because the tax burden is passed on to the government.

Alabama v. King & Boozer, (U.S. 1941) 62 S. Ct. 43.