Davis v. Chilivis

Webb, Judge.

Are discounts to employees on the price of meals, subsequently paid to the cafeteria management by the employer, subject to the retailers’ and consumers’ sales and use tax?

The revenue commissioner assessed taxes on these payments, and the trial court upheld the assessment. We affirm.

Under an agreement with Davis Brothers in the operation of a cafeteria in the Trust Company Bank building, employees of Trust Company were granted a discount of 30 to 40 percent from the regular meal price. Trust Company monthly reimbursed Davis the total amount of the discount. Davis collected sales…