with whom Justice Marshall, Justice Blackmun, and Justice Kennedy join, concurring in the judgment in part and dissenting in part.
I concur in the Court’s judgment that North Dakota’s reporting requirement is lawful, but cannot join the Court in upholding that State’s labeling requirement. I cannot join the plurality because it underestimates the degree to which North Dakota’s law interferes with federal operations and derogates the Federal Government’s immunity from such interference, which is secured by the Supremacy Clause. I cannot join Justice Scalia because his approach is at odds with our decision in United States v. Mississippi Tax Comm’n, 421 U. S. 599 (1975) (Mississippi Tax Comm’n II).
*449I
The labeling requirement imposed by North Dakota is not a trifling inconvenience necessary to the State’s regulatory regime. An importer or distiller supplying the United States military bases in North Dakota must not only purchase or manufacture special labels and affix one to each bottle, it also must segregate and then track those bottles throughout the remainder of its manufacturing and distribution process. The special label requirement throws a wrench into the firm’s entire production system. The cost of complying with the regulation, therefore, is far greater than the few pennies per label acknowledged by the plurality. See ante, at 428-429. Five of the Government’s suppliers have declined to continue shipping to the military bases in North Dakota as a direct result. The five firms are the primary United States distributors for nine popular brands of liquor: Chivas Regal scotch, Johnnie Walker scotch, Tanqueray gin, Canadian Club whiskey, Courvoisier cognac, Jim Beam bourbon, Seagrams 7 Crown whiskey, Smirnoff vodka, and Jose Cuervo tequila. The U. S. importer of Beefeaters gin agreed to continue doing business, but only at a price increase of up to $20.50 per case. The suppliers of these brands potentially still available to fill the military’s needs are either companies operating further down the distribution chain than these distillers and importers, who might be willing to undertake the onerous labeling requirement and duly charge the Government for their trouble, or North Dakota’s own liquor wholesalers who are exempt from the requirement.
The labeling requirement, furthermore, cannot be considered “necessary” to the State’s liquor regulatory regime by any definition of the term. The State could achieve the same result in its effort to “prevent the unlawful diversion of liquor into [its] regulated intrastate markets,” ante, at 431, by instead requiring special labels on liquor shipped to in-state *450wholesalers. Such labels would accomplish precisely the same goal — providing a means for state police to distinguish legal bottles from illegal ones — without interfering with federal operations. The State is also free to enforce its reporting requirement and take any other action that does not interfere with federal activities, including negotiating a mutual enforcement program with the military, which is itself governed by a regulation prohibiting the kind of diversion that the State seeks to control. See DoD Directive 1015.3-R, ch. 4(F)(3) (May 1982).1
That North Dakota’s declared purpose for implementing the regulation is to discourage and police unlawful diversion of liquor into its domestic market does not prevent this Court from ruling on its constitutionality. ' To be sure, this Court has twice said that the States retain police power to regulate shipments of liquor through their territory “insofar as necessary to prevent” unlawful diversion in the absence of conflicting federal regulation. United States v. Mississippi Tax Comm’n, 412 U. S. 363, 377 (1973) (Mississippi Tax Comm’n I); see also Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324, 333-334 (1964). Such statements were indications that this Court believed that States are not rendered utterly powerless in this respect by the dormant Commerce Clause. We have never held, however, that any regulation with this avowed purpose is insulated from review under the federal immunity doctrine or any other constitutional ground, including the dormant Commerce Clause. Nor have we ever upheld such a regulation, or any state regulation of liquor that clashed with some federal law or operation, on the basis *451of a “presumption of validity.” Cf. ante, at 433. Indeed, our previous, limited statements — that States are not prevented by the Commerce Clause from regulating shipments of liquor through their territory where necessary to prevent diversion — recognized that the regulations must be consistent with other constitutional requirements. See Mississippi Tax Comm’n I, supra, at 377 (recognizing such state power only “in the absence of conflicting federal regulation”). Since the States’ power is limited by the doctrine of federal pre-emption, which flows from the Supremacy Clause, then that power must also be limited by the doctrine of federal immunity, which also flows from the Supremacy Clause.2
II
The plurality characterizes the doctrine of federal immunity as invalidating state laws only if they regulate the Federal Government directly or discriminate against the Government or those with whom it deals. See ante, at 435. As the plurality recognizes, “a regulation imposed on one who deals with the Government has as much potential to obstruct governmental functions as a regulation imposed on the Government itself.” Ante, at 438. But contrary to the plurality’s view, the rule to be distilled from our prior cases is that those dealing with the Federal Government enjoy immunity from *452state control not only when a state law discriminates but also when a state law actually and substantially interferes with specific federal programs. See United States v. New Mexico, 455 U. S. 720, 735, n. 11 (1982) (“It remains true, of course, that state taxes are constitutionally invalid if they discriminate against the Federal Government, or substantially interfere with its activities”). Cf. James v. Dravo Contracting Co., 302 U. S. 134, 161 (1937) (permitting application of a general state tax to federal contractors on the ground that it did not discriminate against them or “interfere in any substantial way with the performance of federal functions”). North Dakota’s labeling regulation violates the Supremacy Clause under both standards. It substantially obstructs federal operations, and it discriminates against the Federal Government and its chosen business partners.
A
The plurality recognizes that we have consistently invalidated nondiscriminatory state regulations that interfere with affirmative federal policies, including those governing procurement, but designates these cases as resting on principles of pre-emption. See ante, at 435, and 435-436, n. 7. This characterization is not only at odds with the reasoning in the opinions themselves but suggests a rigid demarcation between the two Supremacy Clause doctrines of federal immunity and pre-emption which is not present in our cases. Whether a state regulation interferes with federal objectives is, of course, a central inquiry in our traditional pre-emption analysis. But when we have evaluated the validity of an obligation imposed by a State on the Federal Government and its business partners, we have justly considered whether the obligation interferes with federal operations as part of our federal immunity analysis.
In Leslie Miller, Inc. v. Arkansas, 352 U. S. 187 (1956), for example, we held that building contractors employed by the Federal Government were immune from a neutral Arkan*453sas regulation requiring contractors to obtain a state license, because the regulation would give the State “a virtual power of review over the federal determination of ‘responsibility’ and would thus frustrate the expressed federal policy of selecting the lowest responsible bidder.” Id., at 190. We found the following rationale applicable:
“ ‘It seems to us that the immunity of the instruments of the United States from state control in the performance of their duties extends to a requirement that they desist from performance until they satisfy a state officer upon examination that they are competent for a necessary part of them and pay a fee for permission to go on. Such a requirement does not merely touch the Government servants remotely by a general rule of conduct; it lays hold of them in their specific attempt to obey orders . . . .’” Ibid, (quoting Johnson v. Maryland, 254 U. S. 51, 57 (1920)).
The plurality’s assertion that Leslie Miller, Inc., was not decided on immunity grounds, see ante, at 436, n. 7, is inconsistent with that opinion’s own analysis.
In Public Utilities Comm’n of California v. United States, 355 U. S. 534 (1958), we found unconstitutional a state provision requiring common carriers to receive state approval before offering free or reduced rate transportation to the United States. We distinguished our cases sustaining nondiscriminatory state taxes and found the regulation unconstitutional because it would have interfered with the Government’s policy of negotiating rates. Id., at 543-545. We explained that a decision in favor of California would have interfered with the activities of federal procurement officials and would have required the Federal Government either to pay higher rates or to conduct separate negotiations with the regulatory divisions of, potentially, each of the then-48 States. Id., at 545-546.
Contrary to the plurality’s contention, ante, at 435-436, n. 7, we concluded that the regulation was unconstitutional *454not under pre-emption doctrine but because it “place[d] a prohibition on the Federal Government” as significant as the licensing requirements invalidated in Leslie Miller, Inc. v. Arkansas, supra, and Johnson v. Maryland, supra, both decided on federal immunity grounds. See supra, at 452-453. Moreover, we relied on the following passage from McCulloch v. Maryland, 4 Wheat. 316, 427 (1819), which elucidates the doctrine of federal immunity:
“It is of the very essence of supremacy to remove all obstacles to [federal] action within its own sphere, and so to modify every power vested in subordinate governments, as to exempt its own operations from their own influence.”
Furthermore, the Court’s rationale in Public Utilities Comm’n — that a state regulation which obstructs federal operations is prohibited under the federal immunity doctrinéis not inconsistent with our decisions sustaining state taxes solely on the ground that they do not discriminate against the Government or its business partners. Indeed, we sustained such a nondiscriminatory state tax on federal contractors the same day that we decided Public Utilities Comm’n. See United States v. City of Detroit, 355 U. S. 466, 472 (1958) (upholding the application of a state tax to lessees of federal property).3
*455In the companion cases of United States v. Georgia Public Service Comm’n, 371 U. S. 285 (1963), and Paul v. United States, 371 U. S. 245 (1963), we invalidated two other neutral *456state regulations because they interfered with the Federal Government’s chosen mode of procurement.4 In Georgia Public Service Comm’n, supra, at 292, we held that Georgia could not revoke the operating certificates of any moving *457company for undertaking a mass intrastate shipment of household goods for the Federal Government at volume discount rates, although such rates violated Georgia law, because federal regulations required Government officers to secure the “ ‘lowest over-all cost’ ” in purchasing transportation “through competitive bidding or negotiation.” Similarly, in Paul v. United States, supra, we held that California minimum wholesale milk prices could not be enforced against sellers supplying United States military bases where federal regulations mandated “full and free competition” and selection of the “lowest responsible bidder” because the “California policy defeats the command to federal officers to procure supplies at the lowest cost to the United States.” Id., at 252, 253.
North Dakota’s labeling regulation would interfere with the military’s ability to comply with affirmative federal policy in the same way as the regulations we invalidated in Public Utilities Comm’n of California v. United States, 355 U. S. 534 (1958); United States v. Georgia Public Service Comm’n, supra, and Paul v. United States, supra. As in those cases, the state regulation threatens to scuttle the Federal Government’s express determination to secure products and services in the most competitive manner possible. Federal law requires military officials to purchase distilled spirits “from the most competitive source, price and other factors considered.” 10 U. S. C. § 2488(a). In enacting this standard, Congress made a deliberate choice to permit, and generally encourage, the military to buy liquor for its bases outside the States in which they are located. The “competitive source” provision replaced an earlier statute requiring bases to purchase all alcoholic beverages in state. See Pub. L. 99-190, §8099, 99 Stat. 1219. The statute’s legislative history shows that Congress determined that the military should be free to purchase distilled spirits out of state from the most competitive source, *458both to save money and to generate more funding for morale and welfare activities.5
For liquor, the most competitive sources are distillers and importers — companies operating at the top of the national distribution chain. It is not only plausible that such companies would find it more trouble than it was worth to comply with North Dakota’s labeling requirement, five companies have already refused to fill orders for the North Dakota bases. At least one other firm has been willing to fill orders only at a substantially increased price. The regulation would force the military to lose some of the advantages of a highly competitive nationwide market, either because it would be subjected to special surcharges by out-of-state suppliers or forced to pay high in-state prices — or some combination of these. Moreover, the difficulties presented by North Dakota’s labeling requirement would increase exponentially if additional States adopt equivalent rules, a consideration we found dispositive in Public Utilities Comm’n of California, supra, at 545-546. See also Memphis Bank & Trust Co. v. Garner, 459 U. S. 392, 398, n. 8 (1983) (rejecting the argu*459ment that a Tennessee bank tax that discriminated against federal obligations might be de minimis because if every State enacted comparable provisions, the Federal Government would sustain significantly higher borrowing costs).
The regulation also intrudes on federal procurement in a manner not unlike the licensing requirement we found unacceptable in Leslie Miller, Inc. v. Arkansas, 352 U. S. 187 (1956). Just as Arkansas’ licensing regulation would have given that State a say as to which building contractor the Federal Government could hire, the North Dakota labeling requirement — by acting as a deterrent to contracting with the Federal Government — would prevent the Federal Government from making an unfettered choice among liquor suppliers. The military cannot effectively comply with Congress’ command to purchase from “the most competitive source” when a number of the most competitive sources — distillers and importers — are driven out of the market by the State’s regulation. Thus, North Dakota’s labeling regulation “‘does not merely touch the Government servants remotely by a general rule of conduct; it lays hold of them in their specific attempt to obey orders.’” Leslie Miller, Inc. v. Arkansas, supra, at 190 (quoting and applying Johnson v. Maryland, 254 U. S., at 57). Federal military procurement policies for distilled spirits, therefore, would be obstructed and, under this Court’s federal immunity doctrine, the regulation should fall.6
*460B
Even if I agreed with the plurality that our federal immunity doctrine proscribes only those state laws that discriminate against the Federal Government or its business partners, however, I would still find North Dakota’s labeling regulation invalid. North Dakota’s labeling regulation plainly discriminates against the distillers and importers who supply the Federal Government because it is applicable only to “liquor destined for delivery to a federal enclave in North Dakota.” N. D. Admin. Code §84-02-01-05(7) (1986). A state control that makes the Federal Government or those with whom it deals worse off than “their counterparts in the private sector” is discriminatory. Washington v. United States, 460 U. S. 536, 543 (1983). “The appropriate question is whether [someone] who is considering working for the Federal Government is faced with a cost he would not have to bear if he were to do the same work for a private party.” Id., at 541, n. 4. An importer or distiller for a particular brand has two kinds of potential customers in North Dakota: military bases and North Dakota wholesalers. For any liquor it sells to the military, it is required to buy or manufacture and affix special labels. Then it must monitor separately the handful of cases destined for the two military bases in North Dakota during the rest of the company’s manufacturing and shipping process, in order to ensure that only specially labeled bottles are sent to Grand Forks and Minot Air Force Bases. However, the same distiller could sell its product to a North Dakota liquor wholesaler without affixing *461special labels or reducing its economies of scale.7 Washington v. United States, therefore, mandates a finding that the labeling requirement discriminates against those who deal with the Federal Government.8
*462The plurality attempts to reach the opposite result by arguing that we need to view the state regulatory scheme in its entirety to determine whether the Federal Government is better or worse off on the whole, in the endeavor affected by a seemingly discriminatory State law, than those given preferred treatment by that law. See ante, at 435. This Court has never subscribed to such an approach. To the contrary, Washington v. United States, supra, which the plurality cites for this proposition, holds merely that where “[t]he tax on federal contractors is part of the same structure, and imposed at the same rate, as the tax on the transactions of private landowners and contractors” it is nondiscriminatory. Id., at 545. In so deciding, the Court specifically cautioned that “[a] different situation would be presented if a State imposed a sales tax on contractors who work for the Federal Government, and an entirely different kind of tax, such as a head tax or a payroll tax, on every other business.” Id., at 546, n. 11.
In Washington v. United States, we found that the state building tax on federal contractors and the slightly larger building tax on private landowners placed no larger an economic burden on federal contractors than on private ones. The Court concluded that although the legal incidence of the taxes was different — one fell on the landowners directly and the other on the federal contractors — the tax did not discriminate against federal contractors or the Federal Government because each tax would be reflected in the fees the contractors could charge. As a result, the Court concluded that the tax on the federal contractors cost them no more than the equivalent tax borne indirectly by their private counterparts, and very likely cost them less. Id., at 541-542.
The conclusion to be drawn from Washington v. United States is that North Dakota would not violate tl. federal immunity doctrine by placing a labeling requirement, on the out-of-state distillers who supply the military bases within the State if it also imposed the same labeling requirement di*463rectly on the in-state wholesalers for all liquor purchased out of state. The plurality’s view, that the labeling regulation is not discriminatory unless the entire North Dakota liquor regulatory system places the Federal Government at a disadvantage competing with in-state wholesalers or retailers, is a different proposition altogether. See also Justice Scalia’s opinion, ante, at 448.
The plurality argues that, in this case, the State compensates the Federal Government for the discriminatory labeling requirement by prohibiting private retailers from buying liquor from out-of-state suppliers and that therefore the Government is favored over other North Dakota retailers. There are core difficulties with this comparison. Since the regulation is imposed on out-of-state suppliers, the regulation would affect the Federal Government when it purchases liquor from those suppliers. The private parties within the State who are comparable, therefore, are North Dakota wholesalers who purchase liquor outside the State and resell it to the distributors and retailers farther down the distribution chain within the State — not North Dakota retailers.
The appropriate comparison between the Federal Government and its actual private counterpart — a North Dakota wholesaler — cannot be made with confidence. The regulations that the plurality presumes are economically equivalent are so entirely unlike that it is wholly speculative that the impositions on in-state wholesalers are comparable to the imposition on the Federal Government and its suppliers. Such a comparison requires us to determine whether there is greater profit in buying from out-of-state distillers at a price that does not reflect the labeling requirement while reaping only the wholesaler’s mark-up, or whether it is more lucrative to buy from whomever will sell specially labeled liquor at whatever price this costs but to reap the margin on retail sales. Even if the comparison could be made reliably at some set moment, there is no reason to expect the result to *464be the same every year; it would vary depending on the business conditions affecting each half of the equation.9
As is obvious, there is simply no assurance that North Dakota is actually regulating evenhandedly when it taxes and licenses some and requires special product labels for others. The labeling regulation is not part of a larger scheme where like obligations are imposed, albeit at different stages of commerce, on federal and nonfederal suppliers. It is that “different situation,” that we identified in Washington v. United States, where unlike and hard to compare obligations are imposed. Contrary to the plurality’s assertion, ante at 438, Washington v. United States does not require or even support a finding that the regulation is constitutional. To the contrary, when a State imposes an obligation, triggered solely by a federal transaction, that cannot be found with confidence to place the Federal Government and its contractors in as good a position as, or better than, its counterparts in the pri*465vate sector, our cases require a finding that the regulation is wholly impermissible.10
Ill
Justice Scalia,alone, agrees with appellants that § 2 of the Twenty-first Amendment11 saves the labeling regulation because the regulation governs the importation of liquor into the State. I believe, however, that the question presented in this case, whether the Twenty-first Amendment empowers States to regulate liquor shipments to military bases over which the Federal Government and a State share concurrent jurisdiction, is one we have addressed before and answered in the negative. In Mississippi Tax Comm’n II, 421 U. S. 599 (1975),12 we explained:
*466“ ‘[T]he Twenty-first Amendment confers no power on a State to regulate — whether by licensing, taxation, or otherwise — the importation of distilled spirits info territory over which the United States exercises exclusive jurisdiction.’” Id., at 613, quoting Mississippi Tax Comm’n I, 412 U. S., at 375.
“We reach the same conclusion as to the concurrent jurisdiction bases to which Art. I, §8, cl. 17, does not apply: ‘Nothing in the language of the [Twenty-first] Amendment nor in its history leads to [the] extraordinary conclusion’ that the Amendment abolished federal immunity with respect to taxes on sales of liquor to the military on bases where the United States and Mississippi exercise concurrent jurisdiction. . . .
“ . . . [I]t is a ‘patently bizarre’ and ‘extraordinary conclusion’ to suggest that the Twenty-first Amendment abolished federal immunity as respects taxes on sales to the bases where the United States and Mississippi exercise concurrent jurisdiction, and ‘now that the claim for the first time is squarely presented, we expressly reject it.’” Mississippi Tax Comm’n II, supra, at 613-614 (quoting Department of Revenue v. James B. Beam Distilling Co., 377 U. S. 341, 345-346 (1964), and Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S., at 332).
Appellants argue that Mississippi Tax Comm’n II is applicable only to taxes or other regulations imposed directly on the United States, because the legal incidence of the tax at issue in that case fell on the military, not its supplier. See 421 U. S., at 609. Appellants’ reliance on this distinction, however, is misplaced. To be sure, a tax or regulation imposed directly on the Federal Government is invariably invalid under the doctrine of federal immunity whereas a tax *467or regulation imposed on those who deal with the Government is invalid only when it actually obstructs or discriminates against federal activity. But the labeling regulation at issue here and the tax at issue in Mississippi Tax Comm’n II, supra, violate the doctrine of federal immunity for precisely the same reason: They burden the Federal Govern-. ment in its conduct of governmental operations. A state regulation that obstructs federal activity is invalid, no matter whom it regulates. To the extent that appellants assume that there are two doctrines of federal immunity — one that protects the Government from direct taxation or regulation and one that protects the Government from the indirect effects of taxes or regulations imposed on those with whom it deals — appellants misconstrue the law.
Justice Scalia argues that Mississippi Tax Comm’n II holds only that the Twenty-first Amendment did not override the Government’s immunity from state taxation but did not reach the question whether the Amendment also overrode federal immunity from state regulation. See ante, at 447-448. I agree that the Court had only a state tax question before it in that decision, but I do not agree that the Court intended to leave the question of state regulation open. See Mississippi Tax Comm’n II, supra, at 613 (concluding that its decision that States have no power to regulate the importation of liquor into exclusive jurisdiction federal enclaves is also applicable to concurrent jurisdiction enclaves).
Justice Scalia’s argument raises two separate questions. First, how do we separate those state liquor importation laws that the Twenty-first Amendment permits to override federal laws and other constitutional prohibitions from those laws it does not? Second, how do we determine whether liquor is being imported into North Dakota or into a federal island within the boundaries of the State?
The first is perhaps the more difficult question. It is clear from our decisions that the power of States over liquor trans*468actions is not plenary,13 even when the State is attempting to regulate liquor importation.14 To the extent that Justice Scalia concédes that Mississippi Tax Comm’n II is decided correctly, ante, at 447-448, his assumption that concurrent jurisdiction federal enclaves are within the State for Twenty-first Amendment purposes requires him to concede that under certain circumstances the “transportation or importation” of liquor into a State “in violation of the laws” of the State in which the enclave is located is not prohibited by the Twenty-first Amendment. This is true because we decided that out-of-state importers and distillers could ship liquor to military bases without collecting and remitting the use tax required by Mississippi law. Thus, Justice Scalia’s approach of drawing a line between taxes and regulations, while consistent with some of our cases, is inconsistent with others such as *469Healy v. Beer Institute, Inc., 491 U. S. 324 (1989). See n. 13, supra.15
There is no need, however, to suggest a resolution as to the exact powers of a State to regulate the importation of liquor into its own territory in this case, because the second question raised by Justice Scalia’s approach is dispositive here. I continue to agree with the Court’s position in Mississippi Tax Comm’n II that concurrent jurisdiction federal enclaves, like exclusive jurisdiction federal enclaves,16 are not within a “State” for purposes of the Twenty-first Amendment. 421 U. S., at 613.
In addition, North Dakota appears to have ceded all of its power concerning the two federal enclaves within its boundaries, and to enjoy concurrent jurisdiction only through the grace of the United States Air Force. As noted by the plurality, see ante, at 429, n. 2, the parties offer no details concerning the terms of the concurrent jurisdiction on these two bases. But the public record fills in some quite relevant data. North Dakota has long ceded by statute to the Federal Government full jurisdiction over any tract of land that may be acquired by the Government for use as a military post (retaining only the power to serve process within). See *470N. D. Cent. Code §54-01-08 (1989). Thus, the State ceded its jurisdiction over the Air Force bases long since.17 Moreover, North Dakota defines its own jurisdiction as extending to all places within its boundaries except, where jurisdiction has been or is ceded to the United States, the State’s jurisdiction is “qualified by the terms of such cession or the laws under which such purchase or condemnation has been or may be made.” See N. D. Cent. Code §54-01-06 (1989). Since 1970, Congress has provided that the branches of the armed services could retrocede some or all of the United States’ jurisdiction over any property administered by them if exclusive jurisdiction is considered unnecessary. See 10 U. S. C. § 2683. North Dakota’s laws permit the Governor to consent to any retrocession of jurisdiction offered. See N. D. Cent. Code §54-01-09.3 (1989).
Contrary to the plurality’s suggestion, see ante, at 429, n. 2, we have never held that “concurrent jurisdiction” always means that the State and the Federal Government each have plenary authority over the territory in question. To the contrary, each decision cited by the plurality either does not address the question, see, e. g., Mississippi Tax Comm’n I, 412 U. S., at 380-381, or says that the division of authority over territory under concurrent jurisdiction is determined by *471the terms of the cession of jurisdiction by the State. See James v. Dravo Contracting Co., 302 U. S., at 142 (“If lands are otherwise acquired [not as exclusive jurisdiction enclaves], and jurisdiction is ceded by the State to the United States, the terms of the cession, to the extent that they may lawfully be prescribed, that is, consistently with the carrying out of the purpose of the acquisition, determine the extent of the federal jurisdiction”); Surplus Trading Co. v. Cook, 281 U. S. 647, 651-652 (1930). Therefore, even were I to accept the proposition that a concurrent jurisdiction federal enclave might be a “State” for purposes of the Twenty-first Amendment, I would regard the State’s authority over the North Dakota bases as an open question for which remand for further proceedings, not reversal, is the appropriate action.
V
Because I find that North Dakota’s labeling requirement both discriminates against the Federal Government and its suppliers and obstructs the operations of the Federal Government, I cannot agree with the Court that it is valid. The operations of the Federal Government are constitutionally immune from such interference by the several States.
The regulation provides:
“Diversion. Packaged alcoholic beverage sales outlets are operated solely for the benefit of authorized purchasers. Members of the Uniformed Services and other authorized purchasers shall not sell, exchange, or otherwise divert packaged alcoholic beverages to unauthorized personnel, or for purposes which violate federal, state, or local laws, or Status of Forces agreements.”
The principle of federal immunity from state tax and other regulation was first discerned in McCulloch v. Maryland, 4 Wheat. 316, 436 (1819) (“The Court has bestowed on this subject its most deliberate consideration. The result is a conviction that the states have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control, the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the general government. This is, we think, the unavoidable consequence of that supremacy which the constitution has declared”) (invalidating a state tax that fell solely on notes issued by the Bank of the United States). Without such immunity, Chief Justice Marshall reasoned, any State held the power to defeat federal operations because “the power to tax involves the power to destroy,” id., at 431, and the Federal Government, unlike the State’s citizens, has no voice in the state legislature with which to guard against abuse. Id., at 428.
The plurality relies on South Carolina v. Baker, 485 U. S. 505, 523 (1988), and United States v. County of Fresno, 429 U. S. 452, 460 (1977), for the proposition that a state regulation is invalid under the immunity doctrine only if it directly regulates the United States or is discriminatory. See ante, at 434-435. This extrapolates too much from the City of Detroit line of cases and ignores the Public Utilities Comm’n of California line. What South Carolina v. Baker and County of Fresno actually say is that a state tax is not invalid unless it is directly laid on the Federal Government or discriminatory. Both cases cite, in support of this proposition, City of Detroit, which itself cites the same rule: “[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.” 355 U. S., at 473. The Court’s decision the same day, in Public Utilities *455Comm’n of California, 355 U. S., at 544, that California’s regulation of public carriers in their dealings with the Federal Government violated the federal immunity doctrine underscores that the language in City of Detroit and other tax cases was never intended to delineate the full scope of the doctrine. The California regulation could not have been characterized as discriminatory. Carriers were permitted to contract with the United States on the same terms as with any other customer; they were just required to obtain state permission before giving the Government special treatment. 355 U. S., at 537,
To be sure, state taxes and regulations are subject to the same restrictions under the federal immunity doctrine, see Mayo v. United States, 319 U. S. 441, 445 (1943). Regulations, however, present a wider range of possibilities for interference with federal activities than do taxes. The tax in City of Detroit did not interfere with the Federal Government’s ability to lease property and therefore interference was not an issue that required discussion. In contrast, the regulation in Public Utilities Comm’n of California did interfere with the Federal Government’s ability to choose “ ‘the least costly means of transportation . . . which will meet military requirements,’” 355 U. S., at 542, and the issue was discussed.
As the Court said in Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 484 (1939), a nondiscriminatory tax “could not be assumed to obstruct the function which [a government entity] had undertaken to perform.” This is because “the purpose of the immunity was not to confer benefits on the employees [of the Federal Government] by relieving them from contributing their share of the financial support of the other government, whose benefits they enjoy, or to give an advantage to a government by enabling it to engage employees at salaries lower than those paid for like services by other employers, public or private, but to prevent undue interference with the one government by imposing on it the tax burdens of the other.” Id., at 483-484 (footnote omitted). Therefore, we have upheld nondiscriminatory taxes imposed on those with whom the Federal Government deals because “ ‘[i]t seems unreasonable to treat the absence of an exemption from taxes [for those with whom the Government deals] as a burden upon the normal exercise of a governmental function.’” See California Bd. of Equalization v. Sierra Summit, Inc., 490 U. S. 844, 849, n. 4 (1989) (quoting favorably Judge Augustus Hand’s explanation from In re Leavy, 85 F. 2d 25, 27 (CA2 1936)). And we have found in specific cases involving “a state tax that is general and nondiscriminatory” that “ ‘[t]he tax does not place *456a financial burden upon the United States; nor will it. . . render the [federal official’s] task more difficult or cumbersome.’” California Board of Equalization, supra, at 850, n. 6 (quoting Wurzel, Taxation During Bankruptcy Liquidation, 55 Harv. L. Rev. 1141, 1166-1169 (1942)). However, the fact that nondiscriminatory taxes have not been found to obstruct federal operations does not mean that nondiscriminatory regulations can be assumed to be equally harmless, as our cases make evident.
These cases as well were decided on immunity grounds. The Court characterized both cases, decided the same day, as presenting the question “whether or not the state regulatory scheme burdened the exercise by the United States of its constitutional powers to maintain the Armed Services.” Paul, 371 U. S., at 250. In addition, in Paul, the Court explained its invalidation of California’s milk regulations, even as applied to purchases of milk for resale at federal commissaries, as follows: “These commissaries are ‘arms of the Government deemed by it essential for the performance of governmental functions,’ and ‘partake of whatever immunities’ the Armed Services ‘may have under the Constitution and federal statutes.’” Id., at 261 (citation omitted). In Georgia Public Service Comm’n, the Court relied on its earlier decision in Public Utilities Comm’n of California, supra, which decision was grounded in the McCulloch v. Maryland federal immunity doctrine. See 371 U. S., at 293.
Moreover, Paul recharacterized the decision in Penn Dairies, Inc. v. Milk Control Comm’n of California, 318 U. S. 261 (1943), which the plurality cites for the proposition that States may permissibly obstruct federal operations if they do so by means of neutral laws, see ante, at 435. In the Paul Court’s view, Penn Dairies stood for the unremarkable proposition that when federal law expressly permits the Government to purchase supplies on the open market “ ‘when the price [of such supplies] is fixed by federal, state, municipal or other competent legal authority’ ” and expressly manifested a “‘hands off’ policy respecting minimum price laws of the States,” state minimum price laws may constitutionally be enforced against the Government’s suppliers. 371 U. S., at 254-255. Revealingly, the plurality musters no support other than the no-longer-apposite Penn Dairies for its assertion that price control regulations aimed at government suppliers have repeatedly been upheld against constitutional challenge. See ante, at 437.
The Senate Armed Services Committee Report explained that it “included a provision mandating that purchases of such alcoholic beverages for resale be made in the most efficient and economic manner, without regard to the location of the source of the beverages, except as that location may affect cost. . . [because] the committee believes that procurement of alcoholic beverage[s] for resale should be subjected to the same favorable effects of competition as is useful in the procurement of other goods and services. Additionally, the committee does not believe it appropriate to impose upon the Department, or the morale and welfare activities of the Department, a requirement that will result in additional costs of tens of millions of dollars, caused by the imposition of indirect State taxation [o]n the Federal government and the lack of competition.” S. Rep. No. 99-331, p. 283 (1986).
The Senate supported deletion of the in-state purchasing requirement for all alcoholic beverages, but the House prevailed in excepting beer and wine, on the ground that the military’s overall alcohol procurement costs would not be unduly affected. H. R. Rep. No. 99-718, pp. 183-184(1986); H. R. Conf. Rep. No. 99-1001, pp. 39, 464 (1986).
Contrary to the plurality’s assertion, I would find the labeling regulation invalid not because it “in any way touched federal activity,” ante, at 437, n. 8, but because it obstructs an affirmative federal procurement policy specified by Congress (and also because it discriminates against the Federal Government and its suppliers). The plurality suggests that my recognition of this aspect of federal immunity doctrine will lead to a parade of horribles: Every state regulation will be potentially subject to challenge. Ibid. But this particular parade has long been braved by our court system, not only under the doctrine of federal immunity but also under the much broader doctrine of pre-emption. See Hines v. Davidowitz, 312 U. S. 52, 67 (1941) (explaining that state law is pre-empted whenever it *460“stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”); Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947) (explaining that state law is pre-empted where it produces a result inconsistent with the objective of a federal statute). A judiciary capable of discerning when federal objectives are frustrated under pre-emption doctrine and when interstate commerce is burdened under dormant Commerce Clause doctrine also may be relied on to determine when federal operations are obstructed under federal immunity doctrine.
Cf. California Board of Equalization v. Sierra Summit, Inc., 490 U. S., at 849 (upholding the application of a use tax to a bankruptcy sale because “ ‘[t]he purchaser at the judicial sale was only required to pay the same tax he would have been bound to pay if he had purchased from anyone else’ ”) (quoting and applying In re Leavy, 85 F. 2d, at 27); United States v. County of Fresno, 429 U. S., at 465 (upholding a state tax on federal lessees because “appellants who rent from the Forest Service are no worse off under California tax laws than those who work for private employers and rent houses in the private sector”).
In Washington v. United States, we also placed reliance on the fact that the state tax at issue was imposed at the same rate on every retail sale in the State and that “virtually every citizen is affected by the tax in the same way.” 460 U. S., at 545-546. Therefore, we concluded, there was a “political check” because the “state tax falls on a significant group of state citizens who can be counted upon to use their votes to keep the State from raising the tax excessively, and thus placing an unfair burden on the Federal Government.” Id,., at 545. As we explained in United States v. County of Fresno, supra, at 463, n. 11: “A tax on the income of federal employees, or a tax on the possessory interest of federal employees in Government houses, if imposed only on them, could be escalated by a State so as to destroy the federal function performed by them either by making the Federal Government unable to hire anyone or by causing the Federal Government to pay prohibitively high salaries. This danger would never arise, however, if the tax is also imposed on the income and property interests of all other residents and voters of the State.” A “political cheek” “has been thought necessary because the United States does not have a direct voice in the state legislatures.” Washington v. United States, 460 U. S., at 545.
This Court has never upheld a state tax or regulation triggered solely by a federal transaction where the Court did not also find that the tax or regulation was part of a larger scheme that affected a politically significant number of citizens of the State. See ibid.; County of Fresno, supra, at 465 (upholding a special tax on federal employees because the Court found that an equivalent tax was imposed on other state residents). In contrast, there is no one represented in the North Dakota State Legislature to provide a political check on that State’s liquor labeling regulation because it affects solely out-of-state companies and the Federal Government.
Even if the plurality were correct that the appropriate comparison were to a North Dakota retailer, so long as the Government continues to purchase liquor out of state, its relative position turns on another apples- and-oranges comparison. Is it economically advantageous to reimburse out-of-state distillers for the cost of compliance with the State’s labeling requirement but to avoid paying a wholesaler’s markup? Or is paying the wholesaler’s markup less expensive, when the base price to the wholesaler need not reflect the cost of compliance?
It is true that if the Government simply purchased liquor from North Dakota’s own wholesalers — at an estimated increased cost of $200,000 to $250,000 in the next year — it would avoid the labeling requirement and thereby occupy the same position as North Dakota retailers. But the regulation cannot be claimed to be nondiscriminatory on the ground that the Government has the option to do what the State may not force it to do directly — i. e., purchase liquor inside the State. Even the plurality concedes that North Dakota may not permissibly restrict the Government from purchasing liquor out of state. See ante, at 440. Thus, to be considered nondiscriminatory the North Dakota regulatory scheme, even under the plurality’s approach, must place the Federal Government and its suppliers in as good a position as their North Dakota counterparts even if the Government chooses not to purchase liquor in state.
By contrast, North Dakota’s reporting requirement does not discriminate against either the military bases or the distillers and importers who supply them, nor does it obstruct federal operations. By its terms, it is imposed on “[a]ll persons sending or bringing liquor into North Dakota.” N. D. Admin. Code § 84-02-01-05(1) (1986). The regulation requires all out-of-state suppliers to make monthly reports to the State whether they sell to the Federal Government or to private firms in North Dakota. The military’s suppliers are in no different a position vis-a-vis the reporting requirement than they would be if they were supplying the private sector. The military is in no different a position than any private firm importing liquor into North Dakota. Nor was there any evidence introduced showing that the regulation interferes with the military’s ability to comply with the affirmative federal policy of purchasing liquor in bulk from the most competitive sources in the country. The reporting requirement has been in effect since 1978, and, therefore, none of the suppliers’ refusals to deal or increase of prices announced in 1986 can be attributed plausibly to this requirement alone.
Section 2 of the Twenty-first Amendment provides:
“The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”
The two Mississippi Tax Comm’n cases required us to decide whether Mississippi constitutionally could require out-of-state liquor suppliers to collect a tax from the Federal Government on liquor shipped to four military bases within the State’s boundaries. The Government had exclusive jurisdiction over two of the bases and concurrent jurisdiction over the *466other two. In Mississippi Tax Comm’n I, 412 U. S. 363 (1973), we decided in favor of the United States as to the two exclusive jurisdiction enclaves. In Mississippi Tax Comm’n II, we decided in favor of the United States as to the two concurrent jurisdiction enclaves.
See, e. g., Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984) (invalidating a Hawaiian liquor tax because it discriminated against interstate commerce); Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691 (1984) (invalidating an Oklahoma prohibition of wine advertisements on cable television broadcasts to households within its jurisdiction); California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U. S. 97 (1980) (deciding that California lacked the power to sanction horizontal price fixing for wine sold within its borders); Craig v. Boren, 429 U. S. 190 (1976) (striking down, under the Equal Protection Clause, a state law setting different drinking ages for men and women); Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324 (1964) (holding that New York lacked power to tax or regulate liquor sold at an airport under state jurisdiction but under Federal Bureau of Customs supervision and intended for use outside the state).
See, e. g., Healy v. Beer Institute, Inc., 491 U. S. 324 (1989) (invalidating a Connecticut law that required out-of-state shippers of beer to affirm that their prices to Connecticut were no higher than the prices charged in bordering States on the ground that the regulation gave Connecticut a prohibited power over commerce outside its borders); Department of Revenue v. James B. Beam Distilling Co., 377 U. S. 341 (1964) (striking down Kentucky’s import tax on scotch under the Export-Import Clause).
To the extent that the Twenty-first Amendment was intended to permit States to prohibit liquor altogether, it is arguable that even federal immunity might not permit the Federal Government to import liquor into a completely dry State to sell at a federal post office or to serve at a cocktail party in a federal court building. But if the Court, as Justice Scalia urges, may draw a line between regulations and taxes, which are in fact just one form of regulation, the Court might even more plausibly draw a line between regulations which govern whether liquor may be imported into a State’s territory under any circumstances and those which govern merely the circumstances under which liquor may be imported.
See Collins v. Yosemite Park & Curry Co., 304 U. S. 518 (1938), in which this Court found unconstitutional the application of California’s liquor taxes and regulations to private concessionaires operating hotels, camps, and stores in Yosemite National Park on the ground that the park was an exclusive federal enclave.
While the parties do not say when the Grand Forks and Minot Air Force enclaves were acquired, the public record does indicate that as recently as 1962 North Dakota had no territory under partial or concurrent jurisdiction with the Federal Government, see Haines, Crimes Committed on Federal Property — Disorderly Jurisdictional Conduct, 4 Crim. Just. J. 375, 402 (1981), and that the statute ceding exclusive jurisdiction over military bases within its boundaries has been in effect since at least 1943. See Report of the Interdepartmental Committee for the Study of Jurisdiction over Federal Areas Within the States, Part I, p. 190 (1956). Thus, at whatever point this land was acquired, North Dakota consented to its being governed under exclusive federal jurisdiction.
A state statute ceding jurisdiction suffices as consent to exclusive federal jurisdiction under Art. I, § 8, cl. 17 (giving Congress the power to exercise exclusive legislation over land only if the State in which it is located consents). See Fort Leavenworth R. Co. v. Lowe, 114 U. S. 525 (1885).