Alabama v. King & Boozer
In Alabama v. King & Boozer, 314 U. S. 1 (1941), the Supreme Court allowed a sales tax to be exacted from an independent contractor acting for the Government on a cost-plus-a-fixed-fee basis.
That tax was measured by the value of lumber used by the contractor in performing its contract. The Government exercised much the same sort of detailed control over that transaction as it did over the present one.
The Court was careful to point out, in rejecting the claim of immunity, that "Who, in any particular transaction like the present, is a `purchaser' within the meaning of the statute, is a question of state law on which only the Supreme Court of the State can speak with final authority." (314 U. S., at 9-10.)
In that case, however, the Supreme Court of Alabama had held the transaction immune from the tax. There was no authoritative state determination of the legal incidence of the tax.
The Court therefore assumed, (314 U. S., at 10), that the tax fell on the "purchaser" of the lumber in the common-law sense.
The Court then went on to show, in answer to the same arguments which the Government has made in this case, that the United States was not a purchaser of the lumber even under common-law rules.