Mr. Justice Black
delivered the opinion of the Court.
• The United States asks this Court to strike down as unconstitutional a tax statute of the State of Michigan as applied to a lessee of government property. In general terms this statute, Public Act 189 of 1953, provides that when tax-exempt real property is used by a private party in a business conducted for profit the private party is subject to taxation to the same extent as though he owned the property.
Here the United States was the owner of an industrial plant in Detroit, Michigan. It leased a portion of that plant to the Borg-Warner Corporation at a stipulated annual rental for use in the latter’s private manufacturing business. The lease provided that Borg-Warner could deduct from the agreed rental any taxes paid by it under Public Act 189 or similar state statutes enacted during the term of the lease, but the Government reserved the right to contest the validity of such taxes.
On January 1, 1954, a tax was assessed against Borg-Warner under Public Act 189. The tax was based on the value of the property leased and computed at the rate used for calculating real property taxes. Under protest Borg-Warner paid part of the assessment. Subsequently the United States and Borg-Warner filed this suit in a state court for refund of the amount paid. They charged that the tax was repugnant to the Constitution of the United States because it imposed a levy upon government property and discriminated against those using such property. The lower court however upheld the tax and the Michigan Supreme Court affirmed. 345 Mich. 601, 77 N. W. 2d 79. It ruled that the tax was neither discriminatory nor on the property of the United States but instead was a tax on the lessee’s privilege of using the property in a private business conducted for profit. We noted probable jurisdiction of an appeal by the United States and Borg-Warner from this decision. 352 U. S. 962.
This Court has held that a State cannot constitutionally levy a tax directly against the Government of the United States or its property without the consent of Congress. M’Culloch v. Maryland, 4 Wheat. 316; Van Brocklin v. Tennessee, 117 U. S. 151. At the same time it is well settled that the Government’s constitutional immunity does not shield private parties with whom it does business from state taxes imposed on them merely because part or all of the financial burden of the tax eventually falls on the Government. See, e. g., James v. Dravo Contracting Co., 302 U. S. 134; Graves v. New York ex rel. O’Keefe, 306 U. S. 466; Alabama v. King & Boozer, 314 U. S. 1. Of course in determining whether a tax is actually laid on the United States or its property this Court goes beyond the bare face of the taxing statute to consider all relevant circumstances.
The Michigan statute challenged here imposes a tax on private lessees and users of tax-exempt property who use such property in a business conducted for profit. Any taxes due under the statute are the personal obligation of the private lessee or user. The owner is not liable for their payment nor is the property itself subject to any lien if they remain unpaid. So far as the United States is concerned as the owner of the exempt property used in this case it seems clear that there was no attempt to levy against its property or treasury.
Nevertheless the Government argues that since the tax is measured by the value of the property used it should be treated as nothing but a contrivance to lay a tax on that property. We do not find this argument persuasive. A tax for the beneficial use of property, as distinguished from a tax on the property itself, has long been a commonplace in this country. See Henneford, v. Silas Mason Co., 300 U. S. 577, 582-583. In measuring such a use tax it seems neither irregular nor extravagant to resort to the value of the property used; indeed no more so than measuring a sales tax by the value of the property sold. Public Act 189 was apparently designed to equalize the annual tax burden carried by private businesses using exempt property with that of similar businesses using nonexempt property. Other things being the same, it seems obvious enough that use of exempt property is worth as much as use of comparable taxed property during the same interval. In our judgment it was not an impermissible subterfuge but a permissible exercise of its taxing power for Michigan to compute its tax by the value of the property used.
A number of decisions by this Court support this conclusion. For example in Curry v. United States, 314 U. S. 14, we upheld unanimously a state use tax on a contractor who was using government-owned materials although the tax was based on the full value of those materials. Similarly in Esso Standard Oil Co. v. Evans, 345 U. S. 495, the Court held valid a state tax on the privilege of storing gasoline even though that part of the tax which was challenged was measured by the number of gallons of government-owned gasoline stored with the taxpayer. While it is true that the tax here is measured by the value of government property instead of by its quantity as in Esso such technical difference has no meaningful significance in determining whether the Constitution prohibits this tax. Still other cases further confirm the proposition that it may be permissible for a State to measure a tax imposed on a valid subject of state taxation by taking into account government property which is itself tax-exempt. See, e. g., Home Insurance Co. v. New York, 134 U. S. 594; Plummer v. Coler, 178 U. S. 115; Educational Films Corp. v. Ward, 282 U. S. 379; Pacific Co. v. Johnson, 285 U. S. 480, 489-490.
In urging that the tax assessed here be struck down the appellants rely primarily on United States v. Allegheny County, 322 U. S. 174, but we do not think that case is at all controlling. In Allegheny the Court ruled invalid a tax which the State did not contend was “anything other than the old and widely used ad valorem general property tax” to the extent it was laid on government property in the hands of a private bailee. Reviewing all the circumstances the Court concluded that the tax was simply and forthrightly imposed on the property itself, not on the privilege of using or possessing it. In carefully reserving the question whether the bailee could be taxed for exercising such privileges, the Court stated:
“Whether such a right of possession and use in view of all the circumstances could be taxed by appropriate proceedings we do not decide.
“Actual possession and custody of Government property nearly always are in someone who is not himself the Government but acts in its behalf and for its purposes. He may be an officer, an agent, or a contractor. His personal advantages from the relationship by way of salary, profit, or beneficial personal use of the property may be taxed as we have held.” 322 U. S.. at 184. 186, 187.
Here we have a tax which is imposed on a party using tax-exempt property for its own “beneficial personal use” and “advantage.”
It is undoubtedly true, as the Government points out, that it will not be able to secure as high rentals if lessees are taxed for using its property. But as this Court has ruled in James v. Dravo Contracting Co., 302 U. S. 134, Alabama v. King & Boozer, 314 U. S. 1, and numerous other cases, the imposition of an increased financial burden on the Government does not, by itself, vitiate a state tax. King cfc Boozer offers a striking example. There a private party, acting under contract with the United States, purchased materials which the contract required him to transfer to the Government. At the same time the Government agreed to pay his costs plus a fixed fee so a state excise levied on his purchase was passed directly and completely to the Govérnment. Yet despite the immediate financial burden imposed on the United States, this Court, without dissent, upheld the tax.
We are aware of course that the general principles laid down in Dravo, King & Boozer and subsequent cases do not resolve all the difficulties in the area of intergovernmental tax immunity, but they were adopted by this Court, with the full support of the Government, as the least complicated, the most workable and the proper standards for decision in this much litigated and often confused field and we adhere to them.
It still remains true, as it has from the beginning, that a tax may be invalid even though it does not fall directly on the United States if it operates so as to discriminate against the Government or those with whom it deals. Cf. M’Culloch v. Maryland, 4 Wheat. 316. But here the tax applies to every private party who uses exempt property in Michigan in connection with a business conducted for private gain. Under Michigan law this means persons who use property owned by the Federal Government, the State, its political subdivisions, churches, charitable organizations and a great host of other entities. The class defined is not an arbitrary or invidiously discriminatory one. As suggested before the legislature apparently was trying to equate the tax burden imposed on private enterprise using exempt property with that carried by similar businesses using taxed property. Those using exempt property are required to pay no greater tax than that placed on private owners or passed on by them to their business lessees. In the absence of such equalization the lessees of tax-exempt property might well be given a distinct economic preference over their neighboring competitors, as well as escaping their fair share of local tax responsibility. Cf. Henneford v. Silas Mason Co., 300 U. S. 577, 583-585. Nor is there any showing that the tax is in fact administered to discriminate against those using federal property. To the contrary undisputed evidence introduced by appellees demonstrates that lessees of other exempt property have also been taxed.
Today the United States does business with a vast number of private parties. In this Court the trend has been to reject immunizing these private parties from nondiscriminatory state taxes as a matter of constitutional law. Cf. Penn Dairies v. Milk Control Comm’n, 318 U. S. 261, 270. Of course this is not to say that Congress, acting within the proper scope of its power, cannot confer immunity by statute where it does not exist constitutionally. Wise and flexible adjustment of intergovernmental tax immunity calls for political and economic considerations of the greatest difficulty and delicacy. Such complex problems are ones which Congress is best qualified to resolve. As the Government points out Congress has already extensively legislated in this area by permitting States to tax what would have otherwise been immune. To hold that the tax imposed here on a private business violates the Government’s constitutional tax immunity would improperly impair the taxing power of the State.
Affirmed.
[For opinion of Mr. Justice Frankfurter, see post, p. 495.]
[For opinion of Mr. Justice Harlan, see post, p. 505.]
Now compiled in 6 Mich. Stat. Ann., 1950 (1957 Cum. Supp.), §§7.7 (5) and (6). In full the Act reads:
“AN ACT to provide for the taxation of lessees and users of tax-exempt property.
“Sec. 1. When any real property which for any reason is exempt from taxation is leased, loaned or otherwise made available to and used by a private individual, association or corporation in connection with a business conducted for profit, except where the use is by way of a concession in or relative to the use of a public airport, park, market, fair ground or similar property which is available to the use of the general public [sic], shall be subject to taxation in the same amount and to the same extent as though the lessee or user were the owner of such property: Provided, however, That the foregoing shall not apply to federal property for which payments are made in lieu of taxes in amounts equivalent to taxes which might otherwise be lawfully assessed or property of any state-supported educational institution.
“Sec. 2. Taxes shall be assessed to such lessees or users of real property and collected in the same manner as taxes assessed to owners of real property, except that such taxes shall not become a lien against the property. When due, such taxes shall constitute a debt due from the lessee or user to the township, city, village, county and school district for which the taxes were assessed and shall be recoverable by direct action of assumpsit.”
The Government also places reliance on Macollen Co. v. Massachusetts, 279 U. S. 620. The weight of that case as a precedent was substantially impaired by its narrow distinction in Educational Films Corp. v. Ward, 282 U. S. 379, 392, and the reasoning of the Court in Pacific Co. v. Johnson, 285 U. S. 480, 495. Later in New York ex rel. Northern Finance Corp. v. Lynch, 290 U. S. 601, a case which seems indistinguishable from Macollen on its facts, the Court in a per curiam opinion upheld the same kind of state tax which it had struck down in Macollen.
See, e. g., Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 485-486; Helvering v. Gerhardt, 304 U. S. 405, 420-422; Helvering v. Mountain Producers Corp., 303 U. S. 376; Metcalf & Eddy v. Mitchell, 269 U. S. 514.
In its brief in King & Boozer the Government strongly urged the Court to abandon whatever remained of the “economic burden” test, which at one time was used to range far afield in striking down state taxes, because that test was “illusory and incapable of consistent application.”
In somewhat greater detail, Michigan statutes exempt from real property taxes all property belonging to the Federal Government, the State, political subdivisions of the State, charitable organizations, educational or scientific institutions, fraternal or secret societies (if used for charitable purposes), churches, libraries, religious societies, cemeteries, state or county agricultural societies, certain corporations making payments to the State in lieu of taxes, nonprofit trusts (if used for hospital or public health purposes), boy or girl scout organizations (up to 160 acres), certain veterans’ homes and land dedicated to public use. See 6 Mich. Stat. Ann., 1950, § 7.7.
The Government points to the fact that Public Act 189 creates an exception to the tax on users where payments are made by the United States “in lieu of taxes in amounts equivalent to taxes which might otherwise be lawfully assessed” as manifesting a purpose to tax government property. But this exemption, which if anything operates in the Government’s favor, avoids the possibility of a double contribution to the revenues of the State where private parties use federal property for their own. commercial purposes. Moreover, it is not at all inconceivable that the Govérnment might, in one way or another, pass the economic burden of such in-lieu payments to the taxpayer using its property even though he was also compelled to pay the tax imposed by Public Act 189.
attorney general of the United States, or his office specified state board or department of education city, town, township, village, or borough government or governmental unit state commission, board, committee, or authority county government or county governmental unit, except school district court or judicial district state department or agency governmental employee or job applicant female governmental employee or job applicant minority governmental employee or job applicant minority female governmental employee or job applicant not listed among agencies in the first Administrative Action variable retired or former governmental employee U.S. House of Representatives interstate compact judge state legislature, house, or committee local governmental unit other than a county, city, town, township, village, or borough governmental official, or an official of an agency established under an interstate compact state or U.S. supreme court local school district or board of education U.S. Senate U.S. senator foreign nation or instrumentality state or local governmental taxpayer, or executor of the estate of state college or university United States State person accused, indicted, or suspected of crime advertising business or agency agent, fiduciary, trustee, or executor airplane manufacturer, or manufacturer of parts of airplanes airline distributor, importer, or exporter of alcoholic beverages alien, person subject to a denaturalization proceeding, or one whose citizenship is revoked American Medical Association National Railroad Passenger Corp. amusement establishment, or recreational facility arrested person, or pretrial detainee attorney, or person acting as such;includes bar applicant or law student, or law firm or bar association author, copyright holder bank, savings and loan, credit union, investment company bankrupt person or business, or business in reorganization establishment serving liquor by the glass, or package liquor store water transportation, stevedore bookstore, newsstand, printer, bindery, purveyor or distributor of books or magazines brewery, distillery broker, stock exchange, investment or securities firm construction industry bus or motorized passenger transportation vehicle business, corporation buyer, purchaser cable TV car dealer person convicted of crime tangible property, other than real estate, including contraband chemical company child, children, including adopted or illegitimate religious organization, institution, or person private club or facility coal company or coal mine operator computer business or manufacturer, hardware or software consumer, consumer organization creditor, including institution appearing as such; e.g., a finance company person allegedly criminally insane or mentally incompetent to stand trial defendant debtor real estate developer disabled person or disability benefit claimant distributor person subject to selective service, including conscientious objector drug manufacturer druggist, pharmacist, pharmacy employee, or job applicant, including beneficiaries of employer-employee trust agreement, employee health and welfare fund, or multi-employer pension plan electric equipment manufacturer electric or hydroelectric power utility, power cooperative, or gas and electric company eleemosynary institution or person environmental organization employer. If employer's relations with employees are governed by the nature of the employer's business (e.g., railroad, boat), rather than labor law generally, the more specific designation is used in place of Employer. farmer, farm worker, or farm organization father female employee or job applicant female movie, play, pictorial representation, theatrical production, actor, or exhibitor or distributor of fisherman or fishing company food, meat packing, or processing company, stockyard foreign (non-American) nongovernmental entity franchiser franchisee lesbian, gay, bisexual, transexual person or organization person who guarantees another's obligations handicapped individual, or organization of devoted to health organization or person, nursing home, medical clinic or laboratory, chiropractor heir, or beneficiary, or person so claiming to be hospital, medical center husband, or ex-husband involuntarily committed mental patient Indian, including Indian tribe or nation insurance company, or surety inventor, patent assigner, trademark owner or holder investor injured person or legal entity, nonphysically and non-employment related juvenile government contractor holder of a license or permit, or applicant therefor magazine male medical or Medicaid claimant medical supply or manufacturing co. racial or ethnic minority employee or job applicant minority female employee or job applicant manufacturer management, executive officer, or director, of business entity military personnel, or dependent of, including reservist mining company or miner, excluding coal, oil, or pipeline company mother auto manufacturer newspaper, newsletter, journal of opinion, news service radio and television network, except cable tv nonprofit organization or business nonresident nuclear power plant or facility owner, landlord, or claimant to ownership, fee interest, or possession of land as well as chattels shareholders to whom a tender offer is made tender offer oil company, or natural gas producer elderly person, or organization dedicated to the elderly out of state noncriminal defendant political action committee parent or parents parking lot or service patient of a health professional telephone, telecommunications, or telegraph company physician, MD or DO, dentist, or medical society public interest organization physically injured person, including wrongful death, who is not an employee pipe line company package, luggage, container political candidate, activist, committee, party, party member, organization, or elected official indigent, needy, welfare recipient indigent defendant private person prisoner, inmate of penal institution professional organization, business, or person probationer, or parolee protester, demonstrator, picketer or pamphleteer (non-employment related), or non-indigent loiterer public utility publisher, publishing company radio station racial or ethnic minority person or organization protesting racial or ethnic segregation or discrimination racial or ethnic minority student or applicant for admission to an educational institution realtor journalist, columnist, member of the news media resident restaurant, food vendor retarded person, or mental incompetent retired or former employee railroad private school, college, or university seller or vendor shipper, including importer and exporter shopping center, mall spouse, or former spouse stockholder, shareholder, or bondholder retail business or outlet student, or applicant for admission to an educational institution taxpayer or executor of taxpayer's estate, federal only tenant or lessee theater, studio forest products, lumber, or logging company person traveling or wishing to travel abroad, or overseas travel agent trucking company, or motor carrier television station union member unemployed person or unemployment compensation applicant or claimant union, labor organization, or official of veteran voter, prospective voter, elector, or a nonelective official seeking reapportionment or redistricting of legislative districts (POL) wholesale trade wife, or ex-wife witness, or person under subpoena network slave slave-owner bank of the united states timber company u.s. job applicants or employees Army and Air Force Exchange Service Atomic Energy Commission Secretary or administrative unit or personnel of the U.S. Air Force Department or Secretary of Agriculture Alien Property Custodian Secretary or administrative unit or personnel of the U.S. Army Board of Immigration Appeals Bureau of Indian Affairs Bonneville Power Administration Benefits Review Board Civil Aeronautics Board Bureau of the Census Central Intelligence Agency Commodity Futures Trading Commission Department or Secretary of Commerce Comptroller of Currency Consumer Product Safety Commission Civil Rights Commission Civil Service Commission, U.S. Customs Service or Commissioner of Customs Defense Base Closure and REalignment Commission Drug Enforcement Agency Department or Secretary of Defense (and Department or Secretary of War) Department or Secretary of Energy Department or Secretary of the Interior Department of Justice or Attorney General Department or Secretary of State Department or Secretary of Transportation Department or Secretary of Education U.S. Employees' Compensation Commission, or Commissioner Equal Employment Opportunity Commission Environmental Protection Agency or Administrator Federal Aviation Agency or Administration Federal Bureau of Investigation or Director Federal Bureau of Prisons Farm Credit Administration Federal Communications Commission (including a predecessor, Federal Radio Commission) Federal Credit Union Administration Food and Drug Administration Federal Deposit Insurance Corporation Federal Energy Administration Federal Election Commission Federal Energy Regulatory Commission Federal Housing Administration Federal Home Loan Bank Board Federal Labor Relations Authority Federal Maritime Board Federal Maritime Commission Farmers Home Administration Federal Parole Board Federal Power Commission Federal Railroad Administration Federal Reserve Board of Governors Federal Reserve System Federal Savings and Loan Insurance Corporation Federal Trade Commission Federal Works Administration, or Administrator General Accounting Office Comptroller General General Services Administration Department or Secretary of Health, Education and Welfare Department or Secretary of Health and Human Services Department or Secretary of Housing and Urban Development Interstate Commerce Commission Indian Claims Commission Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement Internal Revenue Service, Collector, Commissioner, or District Director of Information Security Oversight Office Department or Secretary of Labor Loyalty Review Board Legal Services Corporation Merit Systems Protection Board Multistate Tax Commission National Aeronautics and Space Administration Secretary or administrative unit of the U.S. Navy National Credit Union Administration National Endowment for the Arts National Enforcement Commission National Highway Traffic Safety Administration National Labor Relations Board, or regional office or officer National Mediation Board National Railroad Adjustment Board Nuclear Regulatory Commission National Security Agency Office of Economic Opportunity Office of Management and Budget Office of Price Administration, or Price Administrator Office of Personnel Management Occupational Safety and Health Administration Occupational Safety and Health Review Commission Office of Workers' Compensation Programs Patent Office, or Commissioner of, or Board of Appeals of Pay Board (established under the Economic Stabilization Act of 1970) Pension Benefit Guaranty Corporation U.S. Public Health Service Postal Rate Commission Provider Reimbursement Review Board Renegotiation Board Railroad Adjustment Board Railroad Retirement Board Subversive Activities Control Board Small Business Administration Securities and Exchange Commission Social Security Administration or Commissioner Selective Service System Department or Secretary of the Treasury Tennessee Valley Authority United States Forest Service United States Parole Commission Postal Service and Post Office, or Postmaster General, or Postmaster United States Sentencing Commission Veterans' Administration War Production Board Wage Stabilization Board General Land Office of Commissioners Transportation Security Administration Surface Transportation Board U.S. Shipping Board Emergency Fleet Corp. Reconstruction Finance Corp. Department or Secretary of Homeland Security Unidentifiable International Entity