THE DECISION of the District government to sue President Carter's inaugural committee is a welcome step in their two-year-old dispute. The city claims the committee owes it over $73,000, and the committee contends that it doesn't. The court suit, at the very least, offers some hope of settling the dispute. Beyond that, the litigation might well lead to a clearer legal definition of just what an inaugural committee is.

At issue is about $51,000 in taxes on the sale of inaugural items and the use of reviewing stands and other equipment, and another $22,000 for work done by city employees in constructing the inaugural reviewing stands. The Office of Management and Budget paid the city $650,000 to reimburse it for the use of city services during the inaugural festivities. That payment is part of an arrangement mandated by the District's Home Rule Act; it has nothing to do with the dispute between the inaugural committee and the city. The inaugural committee contends that the congressional legislation governing inaugural ceremonies, by making the inaugural committees part of the federal government, also makes them tax-exempt organizations. And if that is so, it would follow that the committee doesn't have to pay the $51,000 incity taxes. Committee officials don't dispute the amount owned for use of city workmen, but say they won't pay it as long as the two amounts are linked together. District officials, on the other hand, contend that the congressional legislation did not make inaugural committees part of the federal government. They are, according to city officials, private corporations subject to city laws - taxes.

Now it is true that the law does not specifically make inaugural committees tax-exempt. But it is sufficiently vague, in our reading of it, that both the committee's position and the city's position can be reasonably argued. That's why we think the court suit could help clear up the confusion. But a sounder way to do this would be for Congress to clarify the legislation on inaugural ceremonies (which was adopted over 20 years ago) so as to remove all doubts about the role of the inaugural committees and their responsibilities to the District.