Sodexho Management, Inc., v. Ruth E. Johnson

This dispute arises from the assessment of the “contractor’s use tax” against Sodexho Management, Inc. for its use of personal property owned and utilities provided by David Lipscomb University. Sodexho used the university’s property to provide food service for the tax-exempt university. The Commissioner assessed a use tax on the value of the personal property and utilities provided by the university because the university, as an exempt organization, had not previously paid sales tax. The pivotal issue is whether Sodexho operated the food service as an agent of the tax exempt university or as an independent contractor. The Chancellor held that Sodexho was an agent of the its burden of proof to establish that it was an agent of the university and thus is liable for the use tax. Tenn. R. App. P.3 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded