United States v. District of Columbia ( 1981 )

GINSBURG, Circuit Judge:

This sales tax controversy stems from a conference sponsored by the United States Department of Commerce held in early 1978 at the Sheraton Park Hotel in Washington, D.C. Courtesy Associates, Inc. (Courtesy), pursuant to a cost-plus-fixed-fee contract with the Department of Commerce, provided management and logistic services for the conference. Courtesy paid the amount billed by the Sheraton Park for space and food, including D.C. sales tax, after the hotel’s charges had been approved by the Commerce Department’s contracting officer. In this action, the United States seeks restitution from the District of Columbia for the amount of the sales tax paid by Courtesy and reimbursed, pursuant to the cost-plus-fixed-fee contract, by the United States. Precedent securely indicates that any municipality other than the District of Columbia could tax sales of this sort. Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 482 (1941); United States v. Forst, 442 F.Supp. 920 (W.D.Va.1977), aff’d, 569 F.2d 811 (4th Cir. 1978). We conclude that Congress did not intend to place the District of Columbia on a footing different from other cities in this regard, and therefore hold that the United States is not entitled to the restitution it seeks.

I.

In the summer of 1977, the Department of Commerce began preparations for a five-day White House Conference on Balanced National Growth and Economic Development, to be held in Washington, D.C., January 29-Fébruary 2, 1978. Jerry Manolatos, Assistant Director for Conference Operations, selected the Sheraton Park Hotel as the Conference site after conferring with representatives of several hotels in the area. On August 2, 1977, on informal advice that the Sheraton Park had been selected, the hotel’s representative wrote Manolatos:

Jerry, I understand that you will be working on a contract which will be ready within the next two months, however, for our records, if you would please sign and return the copy of my letter of agreement to you, we will be able to consider this a definite committment [sic].

Appendix (A)74. The record does not indicate that Manolatos ever signed the agreement proffered by the Sheraton Park. It does show that in a reply letter dated August 11, 1977, Manolatos confirmed his “understanding of the agreement reached to date,” and stated that he was

currently working with our Procurement Division to develop a contract for Conference management and logistics, which will incorporate the items specified in your correspondence to us, the accommodations and meal costs, services to be provided by the hotel, and other items to be clarified within the next few weeks.

A75. Manolatos and Sheraton Park personnel had further conversations during the summer concerning accommodations and meals the hotel would provide for the Conference. It bears emphasis, however, that the United States has never asserted Mano-latos had authority to bind the Government to an agreement of any kind.

On September 30, 1977, the Department of Commerce entered into a contract with Courtesy Associates. In return for reimbursement of its costs plus a fixed fee, Courtesy would provide management and logistic services for the Conference. The contract, which specifically named the Sheraton Park Hotel as the Conference site, ¶ 1V.A.3, A81, made Courtesy responsible for “all negotiations and coordination re: meals; purchasing procedures for observers; sleeping accommodations, [and] coordination of function rooms and workshops.” ¶ 1V.D.l.e, A85. After the Conference, upon approval of the Commerce Department, Courtesy was to pay the hotel bill; the Department would then reimburse Courtesy. ¶ IV.D.3.a., A91.

Upon entering into the contract, Courtesy assumed all responsibility for Conference goods, services, and facilities arrangements, “including the negotiating and firming up of prices and quantities of space and food” at the Sheraton Park. Tyler aff. ¶ 5, A69. On January 3,1978, Courtesy sent the Sheraton Park a proposed agreement outlining arrangements for the procurement of space and food; an agent of the hotel signed a copy of the agreement and returned it to Courtesy. Stampfli aff. ¶ 6, A58. The Conference proceeded as planned; the Sheraton Park billed Courtesy for the space and food, including in the bill the D.C. sales tax; Courtesy and the Department of Commerce approved the bill; and Courtesy paid it, with no protest about the sales tax.

The United States thereafter commenced this action seeking to recover the amount of $8,199.95, the total sales tax billed by the Sheraton Park, paid by Courtesy without protest, and reimbursed by the United States. The complaint asserted three bases for the claim that the procurement at issue is not subject to taxation by the District of Columbia: first, the space and food supplied by the Sheraton Park were sales to the United States, exempt from tax under D.C.Code § 47-2605; second, the procurement at issue is “constitutionally immune” from D.C. taxation because the “legal incidence” of the tax is upon the United States;¹ third, Courtesy’s procurement of hotel space and food was a sale for resale to the United States.²

The District of Columbia unsuccessfully moved to dismiss the complaint on the ground that the D.C.Superior Court has exclusive jurisdiction to adjudicate D.C. tax controversies. The United States then sought and was granted summary judgment on the merits of its claim. In a brief order, the district court ruled that, in dealing with the Sheraton Park, Courtesy served as an agent of the United States, and that the hotel space and food procurement was essentially a “direct purchase” by the United States. Citing federal tax immunity decisions,³ the district court declared the sales tax erroneously assessed against Courtesy and entered judgment for the United States in the amount demanded in the complaint. The District of Columbia appeals, urging that the district court (1) lacked subject matter jurisdiction, and (2) erred in determining that the procurement was not subject to the D.C. sales tax.

II.

The United States invoked jurisdiction pursuant to 28 U.S.C. § 1345, which provides generally for access to a federal forum in cases in which the United States is plaintiff:

Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States ....

The District of Columbia, relying on D.C. Code § 11-1202, contends that Congress has vested exclusive authority to entertain challenges to D.C. taxation in the D.C. Superior Court, and has abolished all common-law remedies with respect to such taxation. D.C.Code § 11-1202 reads in pertinent part:

Notwithstanding any other provision of law, the jurisdiction of the Tax Division of the Superior Court to review the validity and amount of all assessments of tax made by the District of Columbia is exclusive. Effective on and after the effective date of the District of Columbia Court Reorganization Act of 1970, any common-law remedy with respect to assessment of tax in the District of Columbia and any equitable action to enjoin such assessments available in a court other than the former District of Columbia Tax Court is abolished.

It is undisputed that if the tax in question had been collected by any state or municipality in the nation other than the District of Columbia, 28 U.S.C. § 1345 would secure original jurisdiction in a federal district court. E.g., United States v. Tax Commission, 421 U.S. 599, 95 S.Ct. 1872, 44 L.Ed.2d 404 (1975). The argument that Congress intended to establish a different rule for the District of Columbia is implausible.⁴ While Congress may displace section 1345 in particular categories of cases if it so desires, courts will not infer such displacement unless Congress has made its intention plain. See United States v. Kloman, 176 F.2d 27, 28 (D.C.Cir.1949) (quoting United States v. UMW, 330 U.S. 258, 272, 67 S.Ct. 677, 685, 91 L.Ed. 884 (1947)); United States v. Livingston, 179 F.Supp. 9, 12 (E.D.S.C.1959) (three-judge court), aff’d per curiam, 364 U.S. 281, 80 S.Ct. 1611, 4 L.Ed.2d 1719 (1960).

No clear indication of a congressional design to exclude this case from the district court’s adjudicatory authority is discernible.⁵ Indeed, as the United States points out and the District of Columbia does not counter, there may be no provision in the D.C.Code embracing the claim asserted here. See D.C.Code §§ 47-2617, -2618 (identifying persons who may seek tax refunds and appeal adverse administrative determinations).⁶ The District of Columbia, acknowledging that the United States might have no recourse to any forum unless it can bring an action under section 1345, suggests that the Government could protect its rights “by means of appropriate contract provisions,” or by “getting its contractors to challenge [the tax].” Reply Brief at 4. It is not probable that Congress would deliberately place such hurdles in the way of the challenge the Government seeks to present. Cf. City of New Orleans v. United States, 371 F.2d 21, 28 (5th Cir.), cert. denied, 387 U.S. 944, 87 S.Ct. 2076, 18 L.Ed.2d 1330 (1967).⁷

In short, the threshold question raised by the District of Columbia has only one answer compatible with this court’s precedent and sensible analysis: this is a civil action commenced by the United States for which Congress did not “otherwise provide”; it is therefore an action within the subject matter jurisdiction of the district court as conferred by 28 U.S.C. § 1345.

III.

In entering judgment for the United States, the district court ruled that Courtesy was an “agent” of the United States and that the procurement of accommodations and meals “was essentially a direct purchase by the United States.” Apparently analogizing exemption for sales to the United States under the D.C.Code to the Federal Government’s immunity from state and local taxation under the Constitution, the district court cited two decisions dealing with federal tax immunity as it bears on transactions involving federal contractors: Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 482 (1941), and United States v. Livingston, 179 F.Supp. 9 (E.D.S. C. 1959) (three-judge court), aff’d per cu-riam, 364 U.S. 281, 80 S.Ct. 1611, 4 L.Ed.2d 1719 (1960). Before turning directly to the D. C. sales tax, therefore, we treat the question whether the Federal Government’s constitutionally based tax immunity would shield the procurement at issue were the taxing jurisdiction a state or a municipality other than the federal city.

The Federal Government’s constitutionally based immunity, derived from the supremacy clause, see McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 4 L.Ed. 579 (1819), once generated “a bewilderingly complex array of judicial decisions.” L. Tribe, American Constitutional Law 394 (1978). Current doctrine, however, establishes a rule of “legal incidence.” Absent congressional consent, a state is barred by the supremacy clause from imposing a tax if the legal incidence of the levy is on the United States, but the Constitution presents no barrier if the legal incidence falls elsewhere:

The Constitution immunizes the United States and its property from taxation by the States, M’Culloch v. Maryland, 4 Wheat. 316 [4 L.Ed. 579] but it does not forbid a tax whose legal incidence is upon a contractor doing business with the United States, even though the economic burden of the tax, by contract or otherwise, is ultimately borne by the United States.

United States v. Boyd, 378 U.S. 39, 44, 84 S.Ct. 1518, 1521, 12 L.Ed.2d 713 (1964) (emphasis added). See generally L. Tribe, supra, at 394-404; Tribe, Intergovernmental Immunities in Litigation, Taxation, and Regulation: Separation of Powers Issues in Controversies About Federalism, 89 Harv.L. Rev. 682, 704-13 (1976) (although the Court’s doctrine may appear wooden, it appropriately safeguards Congress’ mediating role in deciding, free from state or federal executive intrusion, when to confer and when to deny immunity).

Resort to an “economic burden” test, barring a tax levy if the charge is ultimately passed through to the United States, was firmly rejected in Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 482 (1941). That pathmarking decision sustained state taxation of federal contractors’ purchases of lumber to be used in construction of an army camp. The terms of the federal contract required the cost of the tax to be passed on to the United States. Despite the conceded immediate economic burden to the Government, the Court ruled that the only factor of constitutional significance is the legal incidence of the tax.

Alabama law, like District of Columbia law, made the seller collector of the tax, but the obligation to pay fell on the purchaser. “The precise question” in King & Boozer, therefore, was “whether the Government became obligated to pay for the lumber and so was the purchaser whom the [Alabama] statute taxes, but for the claimed immunity.” 314 U.S. at 10, 62 S.Ct. at 46 (emphasis added). Notwithstanding the substantial control the Federal Government exercised over the contractors in King & Boozer, the Court determined that the United States was not the “purchaser” of the lumber within the meaning of the Alabama tax statute. The Government’s control of the contractors did not arm the contractors with any authority to pledge the credit of the United States. The contractors, not the Federal Government, were bound to pay the purchase price to the vendor. Id. at 12, 62 S.Ct. at 46.

Language in King & Boozer suggested that a different result might obtain in cases where the contractor is authorized to pledge the credit of the United States. Kern-Limerick, Inc. v. Scurlock, 347 U.S. 110, 74 S.Ct. 403, 98 L.Ed. 546 (1954), presented just such a situation. The Court held impermissible an Arkansas sales tax levied on purchases by a federal contractor where the Government’s contract (1) specifically identified the contractor as the “purchasing agent” of the United States and (2) made the Government directly liable to the seller. The “significant difference” between Kern-Limerick and King & Boozer, according to the Court, was not any distinction in the economic impact of the Alabama and Arkansas taxes, nor in the degree of discretion the contractors had in selecting suppliers. Rather, it was the express stipulation absent in the King & Boozer federal contract and present in the Kern-Limerick contract: “This purchase is made by the Government. The Government shall be obligated to the Vendor for the purchase price .. .. ” 347 U.S. at 119, 74 S.Ct. at 409. The contract’s explicit identification of “the Government” as the purchaser, the Court concluded, could not be avoided by Arkansas’ attempt to designate the contractor as the purchaser. Under the contract, the United States was the disclosed sole purchaser. Id. at 121, 74 S.Ct. at 410. Hence, the legal incidence of the tax fell on the Government, not on the contractor, and federal tax immunity sheltered the transaction from any state levy. See id. at 120-21, 74 S.Ct. at 409-10.

United States v. Forst, 442 F.Supp. 920, 924 (W.D.Va.1977), aff’d, 569 F.2d 811 (4th Cir. 1978), cogently synthesizes the dispositions in King & Boozer and Kern-Limerick:

These two cases make it clear that it is not critical who holds title to the purchased items as between the United States and its contractor. Nor is the degree of control over the contractor that the United States exercises with respect to the purchases critical. The key factor is whose credit, between the United States and the contractor, is bound by the purchasing agreement with the seller.

(Emphasis added.) In sum, absent a federal contract specifically designating the contractor as an agent authorized to pledge the Government’s credit or explicitly rendering the Government directly liable to the seller, state sales taxes, exacted from federal government contractors, encounter no Court-directed federal immunity shoal.⁸ Congress, of course, may confer such immunity. See United States v. New Mexico, 624 F.2d 111, 116, 121 (10th Cir. 1980), cert. granted, 450 U.S. 909, 101 S.Ct. 1346, 67 L.Ed.2d 332 (1981). But in view of the potential impact on the revenue bases of the states, the judgment should be made by the national legislature, the branch best equipped by its structure and constituency to accommodate the respective interests of the states and the nation. The determination, “intrinsically political” as it is, should not be left to judicial resolution based on shades of differences in particular federal contracts, and even less to government contracting officers dominantly concerned with federal expenditures and not with preservation of state tax revenues against shrinkage. See Tribe, supra, 89 Harv.L.Rev. at 711 & nn.135-37.

As the foregoing description of current precedent demonstrates, federal, con-stitulionally based tax immunity would not bar the levy of a sales tax on procurements of the sort at issue here were the tax imposed by a state. The legal incidence of the District of Columbia sales tax is on the purchaser.⁹ Under King & Boozer and Kern-Limerick, a cost-plus-fixed-fee contractor, unless explicitly designated by the fedcrai contract as an agent with authority to pledge the credit of the United States,¹⁰ qualifies as a purchaser subject to sales tax exactions. That bright line test constrains the judiciary from drawing fine distinctions in an area best left to congressional control. Courtesy, the federal contractor in this case, pledged only its own credit to the vendor, Sheraton Park. Nor does the United States argue otherwise. It has never asserted, nor could it on the basis of the Government contract in the record, that Courtesy had authority to pledge the credit of the United States. Lacking such authority, Courtesy cannot rank as a “purchasing agent” for the United States. Courtesy purchased on its own account and, as is generally the case with cost-plus-fixed-fee contractors, thereafter passed the cost onto the Government.

In addition to King & Boozer, the district court considered as relevant authority United States v. Livingston, 179 F.Supp. 9 (E.D. S.C.1959) (three-judge court), aff’d per curiam, 364 U.S. 281, 80 S.Ct. 1611, 4 L.Ed.2d 1719 (1960). The court apparently believed that Livingston justified characterization of the procurement here as a “direct purchase” by the United States. Livingston held immune from South Carolina sales and use tax the purchases of a contractor performing management services for the Atomic Energy Commission who undertook the work not for profit, but as a contribution to the defense effort. The district court, although it attempted to draw support from Kern-Limerick, relied heavily on the fact that the contractor accepted only a one-dollar fee for its services. 179 F.Supp. at 16-22. The Supreme Court later treated Livingston as confined to its specific facts, noting the “ ‘extraordinary’ contractual relationship between [the contractor] and AEC.” United States v. Boyd, 378 U.S. 39, 45 n.6, 84 S.Ct. 1518, 1522 n.6, 12 L.Ed.2d 713 (1964). The Court held in Boyd that purchases of another AEC management services contractor were subject to state contractor’s use tax: “Because the services involved herein are performed for a substantial fee in the course of the contractor’s commercial operation the Livingston decision is not controlling.” Id. Similarly, Livingston is not controlling in this case. Courtesy undertook the work, not as a patriotic gesture, but for a substantial fixed fee.

Had the conference Courtesy was engaged to facilitate taken place in Annapolis or Williamsburg, we would be obliged to hold that federal law does not bar Maryland or Virginia from imposing a tax on the space and food sold by the hotel. To rule otherwise would ignore, as the dissenting opinion consistently does, the emphasis the Supreme Court has placed on a pledge of the Government’s credit as the key indicator of immunity. Because the conference took place in the District of Columbia, however, we must determine whether, as the United States argues, the D.C. sales tax exempts transactions outside the scope of federal tax immunity. Only two of the several D.C. sales tax exemptions are relevant to this controversy. One is D.C.Code § 47-2605(m), which exempts “[s]ales which a State would be without power to tax under the limitations of the Constitution of the United States.” As explained above, the Constitution would not prevent a state from taxing the procurement at issue here, so this exemption provides no support for the restitution claim the United States asserts.

The other exemption is section 47-2605(a), which exempts sales to the United States.¹¹ The United States contends that “this exemption is broader than the scope of the constitutional immunity of certain sales from state taxation.” Brief for the Appellee at 7. The District of Columbia, on the other hand, maintains that the exemption is coextensive with constitutionality based federal tax immunity. Without calling our attention to any precedent specifically in point, the United States advances three arguments in support of its position.

First, the United States urges, section 47-2605 exempts certain sales “without regard to . .. whether [they] would be constitutionally immune from state sales taxation.” Brief for the Appellee at 21. As an example, the United States cites D.C.Code § 47-2605(q), which exempts sales of materials to be incorporated permanently in any war memorial authorized by Congress to be erected on public grounds of the United States. The drift of this argument is not readily apparent. Congress exempted a variety of sales from the tax, but the policies behind other exemptions shed no bright light on the intended scope of exemption (a).

Second, the United States argues that because another provision, section 47-2605(m), already exempts sales that could not be taxed were the District of Columbia a state, exemption (a) must go further. But nothing indicates that the exemptions were drawn with meticulous care to avoid any overlap. Moreover, it appears that Congress, when it adopted exemption (m), did not focus specifically on federal tax immunity. The only reference to exemption (m) in the legislative history suggests that Congress had in mind the limits imposed by the interstate commerce clause. See 95 Cong.Rec. 6083 (1949) (statement of Sen. Hunt, sponsor of the legislation). The exemption (m) administrative regulations also suggest only commerce clause considerations. See 16 D.C.R.R. § 203.1(1).

The United States further relies on an administrative regulation interpreting exemption (a), 16 D.C.R.R. § 203.1(a), which provides:

Sales to the United States or the District or any instrumentality thereof. For the purposes of this exemption, vendors may treat as nontaxable the receipts from, and shall be relieved from the duty of collecting their reimbursement for tax on, sales to the United States and to the District of Columbia on any purchase order made by an authorized purchasing officer or by contract in which either the United States or the District of Columbia or any instrumentality of either Government is a party.

It is hardly evident that this regulation indicates a broadened scope for the United States’ tax immunity; the regulation can as readily be read as an attempt to codify federal tax immunity precedent.

Since the text of the exemption for sales to the United States does not supply an altogether crisp response to the parties’ contentions, the legislative history of the D.C. sales tax bears consideration. The District of Columbia Sales Tax Act was enacted in 1949 as Title I of the District of Columbia Revenue Act of 1949, Pub.L.No.81-76, 63 Stat. 112. The notion of a sales tax, however, had been ripening for some time. Ten years earlier, the House of Representatives commissioned Dr. Chester B. Pond to conduct a study of the tax structure of the District of Columbia. Although Dr. Pond recommended the enactment of a sales tax as part of a comprehensive revision of the D.C. tax laws, see H.R.Doc.No.108, 76th Cong., 1st Sess. 105 (1939), the idea proved controversial. For a decade, sales tax proposals, introduced in a number of revenue bills, were consistently defeated.

When the sales tax finally passed in 1949, congressional attention still centered on the wisdom of such a tax as a method to raise revenue. Exemptions from the tax did not receive the focused scrutiny of Congress, either in committee reports or floor debate. One clear theme is sounded throughout the legislative history, however: Congress intended to place the District on an equal footing with the states. The Senate Report stated, “The provisions of title I of this bill impose a sales tax for the District of Columbia, which is predicated upon the same theory as are the sales-tax laws of many states.” S.Rep.No.260, 81st Cong., 1st Sess. 7, reprinted in 1949 U.S.Code Cong.Serv. 1297, 1304. The House Report contained identical language. H.R.Rep.No.315, 81st Cong., 1st Sess. 2 (1949). The Senate Report also quoted from Dr. Pond’s 1939 study:

For practical purposes, it is necessary to view the District as a State. Regarded in this light, it follows that the limitations placed upon State taxing power should apply.

S.Rep.No.260, 81st Cong., 1st Sess. 4 reprinted in 1949 U.S.Code Cong.Serv. 1300 (quoting H.R.Doc.No.108, 76th Cong., 1st Sess. 102 (1939)).

Thus, although the legislative history does not specifically address exemption (a), it does display a clear purpose to pattern the D.C. sales tax on state sales tax laws and to limit the District’s taxing power in the manner that state taxation authority is limited. The 1949 act was directed toward restoring the fiscal integrity of the District. No reason has been suggested why Congress would be less sensitive to the impact of an expansive federal immunity on the District’s treasury than Congress has been with regard to the fiscal interests of the states. See United States v. New Mexico, supra, 624 F.2d at 116: “Congress, openly sensitive to the impact on state treasuries, has not extended tax immunity to any class of contractors.” We therefore conclude that exemption (a) is, as the District maintains, coextensive with constitutionally based federal tax immunity.

That should be the end of the inquiry. The United States, however, has tendered a further argument premised on 16 D.C.R.R. § 203.1(a), which exempts sales by contract to which the United States or any instrumentality thereof is a party. As the United States reads the regulation, and now construes the facts, there is a dispositive contract bar to the tax at issue.

In this court, the United States featured beyond other arguments the contention that the Sheraton Park’s sale of space and food was pursuant to a contract the United States had concluded with the hotel, before Courtesy entered the picture.¹² The United States never asserted the existence of such a contract to the district court; the argument appears for the first time on appeal. After examining the record, we conclude that no such contract existed.

The sole support in the record for the existence of a contract between the United States and the Sheraton Park is a vague reference, in the contract between Courtesy and the United States, A91, to the “satisfactory completion of [the hotel’s] contract with the White House Conference.” Although the White House Conference was sometimes referred to as an entity, it was in fact an event. Thus, there is slim reason to assume that the words “White House Conference” were intended as a synonym for “United States.” The reference could as readily be understood to mean the hotel’s contract with Courtesy.

In contrast, the contracts between the United States and Courtesy and between Courtesy and the Sheraton Park are not in doubt. The United States-Courtesy contract is specific in its provisions: Courtesy was responsible for paying the vendor for the rooms and meals, ¶ IV.D.3, A91; Courtesy could seek reimbursement only for expenses actually incurred, ¶ VIII.6, A98, that is, only after it paid the hotel. In accordance with these provisions, the hotel billed Courtesy for the accommodations and meals; Courtesy paid the bill, after Department of Commerce approval; and the Department reimbursed Courtesy.

An official of the Department of Commerce, Jerry Manolatos, engaged in discussions with the hotel before selection of Courtesy as the contractor. The United States attempts to argue that these discussions formed the basis for a contract. But as far as the record indicates, Manolatos did not sign the hotel’s proffered “letter of agreement.” A74. Instead, he merely restated the intended conference dates and preliminary plans for the event, noting that he was “working with the Procurement Division to develop a contract for Conference management and logistics.” A75. The reason for Manolatos’ circumspection seems evident: as the Contracting Officer’s Technical Representative, Tyler aff., A68, he had no authority “to make any commitments or otherwise obligate the Government or authorize any changes which affect the contract price, terms or conditions.” A97. In dealings with the Federal Government, the rule is familiar: only those specifically delegated contracting authority may bind the United States. See 41 C.F.R. § 13-1.450-1(c): “Personnel not delegated contracting authority may not commit the Department, formally or informally, to any type of contractual obligation either before or after contract award.” The Government does not assert, even now, that Manolatos, the only Commerce Department official alleged to have negotiated with the Sheraton Park, had any authority to enter into a contract on behalf of the United States.¹³

Even under principles of contract law generally applicable to private parties, the Manolatos-Sheraton Park communications would not appear to amount to a contract. Although Mandatos had specified dates and discussed room availability with the hotel, he never worked out the details of the undertaking. The record is clear that Courtesy had full responsibility for determining the exact prices and quantities of space and food procured: “After consummation of the [U.S.-Courtesy] contract, Courtesy assumed all responsibility for firming up and arranging for all Conference goods, services and facilities, including the negotiating and firming up of prices and quantities of space and food being procured from the Sheraton Park.” Tyler aff. ¶ 5, A69 (emphasis added). See also Stampfli aff. ¶ 11, A59. Mandatos, the record suggests, merely opened the negotiations and set part of the foundation upon which Courtesy subsequently executed a contract with the hotel.

We conclude that the space and food were not sold “by contract in which . . . the United States . . . [was] a party.” Thus, even under the D.C. regulation (16 D.C.R.R. § 203.1(a)) as read by the United States, the sale in question would not be exempt from taxation. Courtesy was not designated by contract as a “purchasing agent” for the United States and, most importantly, Courtesy had no authority to pledge the Government’s credit. We therefore reverse the judgment of the district court and remand the case with instructions to enter judgment for the District of Columbia.¹⁴

It is so ordered.

1 . Even if the “legal incidence” of the tax fell on the United States, constitutionally grounded federal tax immunity from state taxation would not bar the tax in question. The D.C. sales tax was enacted by Congress, not by a state. The United States abandoned this argument at an early stage of the litigation.

2 . In the district court, the United States pressed this argument vigorously and cited D.C.Code § 47-2601.14(a) in support of its contention. A126-29. The United States has not renewed the “sale for resale” argument on appeal, perhaps in recognition of D.C.Code § 47-2607, which provides that in the absence of a valid certificate of resale, receipts from a sale shall be deemed taxable. The record reflects no resale certificate. Moreover, as the District of Columbia pointed out in the district court, Courtesy “was not a middleman in the wholesale-retail chain,” A136, thus a “sale for resale” exemption does not appear to accommodate the procurement at issue. See United States v. Forst, 442 F.Supp. 920, 925 (W.D.Va.1977), aff'd, 569 F.2d 811 (4th Cir. 1978).

3 . Alabama v. King & Boozer, 314 U.S. 1, 62 S.Ct. 43, 86 L.Ed. 482 (1941); United States v. Livingston, 179 F.Supp. 9 (E.D.S.C.1959) (three-judge court), aff’d per curiam, 364 U.S. 281, 80 S.Ct. 1611, 4 L.Ed.2d 1719 (1960).

4 . The District of Columbia Court Reform and Criminal Procedure Act of 1970, Pub.L.No.91-358, 84 Stat. 473, was intended to create a local court system similar in major respects to court systems in the several states. See S.Rep.No. 405, 91st Cong., 1st Sess. 5 (1969).

5 . The United States cites 28 U.S.C. § 1364 in support of its argument that D.C.Code § 11-1202 does not qualify as an “Act of Congress” within the meaning of the “except” clause of 28 U.S.C. § 1345. Section 1364 provides: “For the purposes of this chapter, references to laws of the United States or Acts of Congress do not include laws applicable exclusively to the District of Columbia.” The United States presses this argument too far in contending that § 1364 was enacted specifically “to ensure that the jurisdiction of the United States District Courts provided for in [28 U.S.C. §§ 1330-1364] would not be affected by the jurisdiction provisions of the Court Reform Act.” Brief for the Appellee at 11. In fact, as the United States later concedes, id. at 12 n.1, the apparent dominant purpose of § 1364 was to assure that federal question jurisdiction under 28 U.S.C. § 1331 would not encompass questions arising under substantive laws applicable solely to the District of Columbia.

6 . The District asserts no authority to obligate the United States or to compel collection from it.

7 . The District relies principally on Herian v. United States, 363 F.Supp. 287 (D.D.C.1973). Herian was an ejectment action brought by the United States in the D.C. Superior Court and removed by the defendant to the United States District Court. Granting the motion of the United States to remand, the district court relied on D.C.Code § 45-910, which provides that “the landlord may bring an action of ejectment to recover possession in the Superior Court of the District of Columbia.” Herian appears to depart from United States v. Kloman, 176 F.2d 27 (D.C.Cir.1949) (§ 1345 is not displaced unless Congress explicitly so directs). Moreover, Herian did not present, as this case does, the prospect that no forum may be available to the Government if the district court lacks authority to hear the controversy.

8 . The dissent in Kern-Limerick criticized the Court’s analysis because it would “permit any government functionary to draw the constitutional line by changing a few words in a contract.” 347 U.S. at 126, 74 S.Ct. at 412 (Douglas, J., dissenting). Cf. United States v. Township of Muskegon, 355 U.S. 484, 486, 78 S.Ct. 483, 485, 2 L.Ed.2d 436 (1958) (if formal contract designation of one party as lessee were dispositive, “immunity could be conferred by a simple stroke of the draftsman’s pen”). See also Tribe, Intergovernmental Immunities in Litigation, Taxation, and Regulation: Separation of Powers Issues in Controversies About Federalism, 89 Harv.L.Rev. 682, 710 (1976) (“To find immunity because the federal executive has included certain terms in its contract seems wholly unjustifiable.”). But cf. United States v. New Mexico, 624 F.2d 111, 116 n.5 (10th Cir. 1980) (“Although we are skeptical of cosmetic provisions drafted by government functionaries, we must find immunity when these contracts inherently and inexorably draw a private corporation so close to the government as to make it a servant.”), cert. granted, 450 U.S. 909, 101 S.Ct. 1346, 67 L.Ed.2d 332 (1981). The Government contract in this case, however, plainly does not fall within the Kern-Limerick fold. It contains nothing resembling the language held to immunize purchases in that case. It neither authorizes Courtesy to obligate the Government to the vendor for the procurement, nor does it render the Government directly obligated to the Sheraton Park for the accommodations and meals.

9 . Although the sales tax is imposed on the vendor, D.C.Code § 47-2602, the purchaser is obligated by statute to reimburse the vendor for the amount of tax. Id. § 47-2603. The legal incidence of such a tax is on the purchaser. “[Wjhere a State requires that its sales tax be passed on to the purchaser and be collected by the vendor from him, this establishes as a matter of law that the legal incidence of the tax falls upon the purchaser.” United States v. Tax Comm’n, 421 U.S. 599, 608, 95 S.Ct. 1872, 1878, 44 L.Ed.2d 404 (1975).

10 . A pledge of the Government’s credit may have more than formal significance. It can be important to a vendor or subcontractor in the event that the contractor is unable to pay for the goods or services.

11 . D.C.Code § 47-2605(a), set out below in full, covers:

Sales to the United States or the District or any instrumentality thereof except sales to national banks and Federal savings and loan associations.

12 . The argument lacks force, for the administrative regulation on which the Government relies cannot expand the scope of the exemption beyond that provided by statute. See District of Columbia v. Payne, 374 F.2d 261, 265 (D.C.Cir.1966).

13 . Because Manolatos lacked actual authority to contract on behalf of the United States, the Government would not be bound by his representations, for the doctrine of apparent authority generally does not apply to dealings with the Government:

Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. . . . And this is so even though ... the agent himself may have been unaware of the limitations on his authority.

Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384, 68 S.Ct. 1, 3, 92 L.Ed. 10 (1974), cited with approval in Schweiker v. Hansen, 450 U.S. 785, 788, 101 S.Ct. 1468, 1470, 67 L.Ed.2d 685 (1981) (per curiam).

The dissenting opinion strays from the record in supposing that Commerce Department officials and representatives other than Mandatos engaged in negotiations with the Sheraton Park, and it conveniently ignores Manolatos’ incapacity to bind the United States to any agreement. We cannot will away the plain fact that there is only one United States purchase contract in this picture: a contract to purchase Courtesy’s services.

14 . No material facts are in dispute. The undisputed facts demonstrate the absence of a contract between the United States and the Sheraton Park and the absence of any authority in Courtesy to pledge the credit of 'the United States. We therefore conclude that the District of Columbia, although it did not move for summary judgment in the court below, is entitled to such a judgment as a matter of law. Jenkins v. Civil Service Comm’n, 460 F.Supp. 611, 612 n.1 (D.D.C.1978); C. Wright & A. Miller, Federal Practice and Procedure § 2720 (1973).