Hollingsworth, Inc. v. Ruth E. Johnson

in which HERSCHEL P. FRANKS and D. MICHAEL SWINEY, JJ., joined.

OPINION

This appeal questions the holding of the Trial Court regarding the right of a corporation to claim bad debt credits for sales tax remitted relative to health club membership contracts which were subsequently defaulted upon. We affirm in part and reverse and dismiss in part.

Prior to February of 1993, Long Health Enterprises, Inc, (hereinafter “Long Health”) operated three health clubs in Knoxville under the name Court South. Membership contracts between Long Health and club members typically provided that after an initial…