In the case of Alabama v. King & Boozer, a partnership et al., the U.S. Supreme Court ruled that a state could impose sales tax on goods purchased by contractors for use in fulfilling federal contracts, even if title to those goods passed directly from vendor to the federal government under terms of contract. The court held that such taxation did not interfere with any governmental function or violate constitutional immunity as long as it was non-discriminatory and did not lay direct tax upon United States itself or its property. The decision clarified that while states cannot directly tax the federal government without consent, they can indirectly do so through taxes imposed on private parties doing business with it.

In the dissenting opinion for Alabama v. King & Boozer, Justice Frank Murphy argued that the majority's decision to allow a state sales tax on materials purchased by contractors for use in federal construction projects violated principles of intergovernmental tax immunity. He contended that this ruling would lead to an undue burden on federal functions and could potentially disrupt national activities if other states followed suit with similar taxes. Furthermore, he disagreed with the majority's interpretation of previous case law and believed it was not applicable to this situation as those cases did not involve direct taxation of government property or operations. In his view, allowing such taxation would undermine constitutional safeguards against state interference in federal affairs.