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City of Golden v. Sodexo America, LLC

Supreme Court of Colorado, En Banc

May 20, 2019

CITY OF GOLDEN, Colorado and Jeff Hansen, in his official capacity as Finance Director of the City of Golden, Colorado, Petitioners
v.
SODEXO AMERICA, LLC, Respondent.

Page 445

          Certiorari to the Colorado Court of Appeals, Court of Appeals Case No. 16CA1355

         Attorneys for Petitioners: Williamson & Hayashi, LLC, David S. Williamson, Mathew M. Munch, Boulder, Colorado

         Attorneys for Respondent: Silverstein & Pomerantz LLP, Neil I. Pomerantz, Mark E. Medina, Michelle Bush, Denver, Colorado

         Attorneys for Amicus Curiae Colorado Department of Revenue: Philip J. Weiser, Attorney General, Russell D. Johnson, Assistant Solicitor General, Denver, Colorado

         Attorneys for Amici Curiae Colorado Higher Education Institutions: Philip J. Weiser, Attorney General, Stephanie Scoville, Senior Assistant Attorney General, Denver, Colorado, Jeremy Hueth, Special Assistant Attorney General, Denver, Colorado

          Attorney for Amicus Curiae Colorado Municipal League: Dianne M. Criswell, Denver, Colorado

         OPINION

         HOOD, JUSTICE

         [¶1] Imagine that two students enter a dining hall at the Colorado School of Mines in the City of Golden. One pays with cash; the other swipes a "BlasterCard" to use a meal-plan credit. Sodexo, Mines’ food service provider, collects sales tax on the cash transactions and remits the tax to Golden. Not so when a student swipes a BlasterCard to use a meal-plan credit. That disparity in tax treatment culminated in this case.

         [¶2] A little background information about BlasterCards helps to flesh out the legal dispute. During the time at issue, Mines loaded each meal-plan student’s BlasterCard, which is a student’s identification card, with an individual meal plan choice. To use their meal plans, students swiped their BlasterCards at a dining facility. Sodexo had nothing to do with loading the students’ BlasterCards with their meal plans— that was all Mines. Sodexo also had no way of knowing if a student had fully paid for his or her meal plan, and Sodexo had no way of enforcing collections against a student who hadn’t fully paid. Again, that was all taken care of by Mines. But neither Mines nor Sodexo collected any sales tax on these meal-plan meals.

         [¶3] When Golden’s Finance Department audited Sodexo and discovered that sales tax for these meal plans had not been collected, it issued a sales and use tax assessment. Sodexo protested and lost, so Sodexo appealed to the district court. The court granted summary judgment for Golden, finding that Sodexo had engaged in taxable retail sales directly to Mines’ students, rather than tax-exempt wholesale sales to Mines.

         [¶4] Undeterred, Sodexo appealed again. This time, a unanimous division of the court of appeals reversed the judgment of the district court, concluding that there were two sales transactions at issue: one between Mines and Sodexo, and the other between Mines and its students. The division further concluded that Mines and Sodexo were engaged in tax-exempt wholesale transactions. Accordingly, the division remanded for entry of judgment in Sodexo’s favor.

         [¶5] We granted Golden’s request to review the division’s decision. But, having done so, we agree with the division that two transactions took place: one between Sodexo and Mines, another between Mines and its students. Like the division below, we conclude that Sodexo sold the meal-plan meals to Mines at wholesale, and, accordingly, these transactions were exempt from taxation under the Code. We therefore affirm the judgment of the court of appeals.

          I. Facts and Procedural History

         [¶6] Mines is a public post-secondary education institution. ...


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