COLORADO COURT OF APPEALS 2017COA118 

 

Court of Appeals No. 16CA1355 

Jefferson County District Court No. 15CV31189 

Honorable Christopher C. Zenisek, Judge 

Sodexo America, LLC, 

Plaintiff-Appellant, 

v. 

City of Golden, Colorado; and Jeff Hansen, in his official capacity as Finance 

Director of the City of Golden, Colorado, 

Defendants-Appellees. 

JUDGMENT REVERSED AND CASE 

REMANDED WITH DIRECTIONS 

Division IV 

Opinion by JUDGE J. JONES 

Graham and Welling, JJ., concur 

Announced September 7, 2017 

Silverstein & Pomerantz LLP, Neil I. Pomerantz, Mark E. Medina, Michelle 

Bush, Denver, Colorado, for Plaintiff-Appellant 

Williamson and Hayashi, LLC, David S. Williamson, Mathew M. Munch, 

Boulder, Colorado, for Defendants-Appellees 

Cynthia H. Coffman, Attorney General, Stephanie Scoville, Assistant Attorney 

General, Jeremy Hueth, Special Assistant Attorney General, Denver, Colorado, 

for Amici Curiae Colorado Higher Education Institutions 
1 

¶ 1 Sodexo America, LLC (Sodexo) provides food services and food 

to the Colorado School of Mines (Mines) pursuant to a contract with 

Mines. Mines, in turn, contracts with its students to provide them 

food (the food obtained, prepared, and served by Sodexo) through 

different types of meal plans. The City of Golden (the City) taxes 

Sodexo for students’ use of the meal plans. This, Sodexo 

maintains, violates the Colorado Constitution and the Golden 

Municipal Code (2015) (Code or GMC).1 

¶ 2 The district court disagreed with Sodexo and granted 

summary judgment for the City on Sodexo’s challenges to the City’s 

assessment and denial of refunds, leading to this appeal. Departing 

from the decision of another division of this court in City of Golden 

v. Aramark Educational Services, LLC, 2013 COA 45, involving a 

similar arrangement, we hold that, under the relevant contract and 

pursuant to the plain language of the Code, no sales occur between 

Sodexo and Mines’ students with meal plans. Instead, Sodexo sells 

meal plan meals to Mines at wholesale. And since the Code 

expressly exempts wholesale sales from taxation, the City’s 

assessment is invalid. We therefore reverse the district court’s 

 

1 We apply the 2015 version of the Code throughout. 
2 

summary judgment and remand the case for entry of judgment in 

Sodexo’s favor. 

I. Background 

¶ 3 The contract between Sodexo and Mines requires Sodexo to 

“provide food services for [Mines] students, faculty, staff, employees 

and invited guests.” It defines food services as “[t]he preparation, 

service and sale of food, beverages, and select goods, merchandise 

and other items to be agreed upon by [Mines] and Sodexo . . . , 

including catering, concessions, retail and meal plans.” But the 

contract also says that the food and other tangible items Sodexo 

provides are deemed Mines’ property alone; Sodexo is essentially 

Mines’ go-between for that food. 

¶ 4 Sodexo provides food services by operating and staffing all of 

the dining facilities on Mines’ campus, both traditional residential 

dining facilities and “branded” dining facilities, including the Slate 

Cafe, Diggers’ Den Food Court, Subway, and Einstein Bros. Bagels. 

A student buying a meal plan from Mines (pursuant to a contract 

with Mines, as explained below) can redeem her meal plan meals at 

any of these facilities. The facilities aren’t advertised to the public 

and are used primarily by Mines’ students and staff. On rare 
3 

occasion, members of the public buy food from the facilities using 

cash or a credit card. 

¶ 5 Sodexo’s contract with Mines sets the prices Mines pays 

Sodexo for each meal that a student redeems pursuant to a meal 

plan the student has purchased from Mines. It also stipulates that 

any increase or decrease in these prices requires Mines’ prior 

approval.

¶ 6 Mines requires every student living in a residence hall to select 

a meal plan from among several options; students living off-campus 

may purchase meal plans. Each meal plan includes a certain 

number of weekly meals and a sum of “Munch Money,” a declining 

balance of points/dollars that can be used at any retail food 

location on campus. At the end of each semester, students lose any 

unused balance of meals and Munch Money. These terms are 

memorialized in contracts that Mines enters into with its students; 

Sodexo doesn’t enter into any food purchase contracts with Mines’ 

students. 

¶ 7 The students’ contracts describe the available meal plan 

options and how much they cost. Mines alone determines prices 

and terms, without Sodexo’s approval, and charges the cost of the 
4 

meal plans to the students’ Mines accounts. Only Mines can 

charge and collect amounts owed for meal plans. 

¶ 8 Students redeem meal plan meals and Munch Money using 

“BlasterCards” provided by Mines. Mines electronically syncs each 

student’s BlasterCard with the meal plan the student has 

purchased from Mines. So each time a student “swipes” her 

BlasterCard on a card reader at a dining facility, Mines’ software 

automatically deducts a meal (or Munch Money) from the student’s 

account. 

¶ 9 Periodically, Mines reports the number of meals used under 

each of its meal plans to Sodexo.2 Sodexo then invoices Mines 

based on the report. The per meal prices Mines pays Sodexo per 

their contract are significantly less than the prices Mines charges 

students under the meal plans. 

¶ 10 The Code says the City may levy a three percent sales tax on 

the “purchase price” of “all sales of tangible personal property and 

services,” including food, unless expressly exempted. GMC 

§ 3.03.010. Sodexo collects and remits sales tax on campus food 

 

2 The contract contemplates monthly reports, but it appears from 

the record that Mines may provide weekly reports. 
5 

purchases made with cash, check, or credit card.3 But the City has 

also assessed Sodexo sales tax on transactions whereby students 

swipe their BlasterCards in exchange for meal plan meals in the 

dining facilities. (Paradoxically, however, the City assesses the tax 

based on the prices Mines pays Sodexo, not on the prices students 

pay Mines.4) As noted, Sodexo’s challenges to this assessment have 

thus far failed. 

II. Discussion 

¶ 11 Sodexo contends that the City can’t tax it for meals purchased 

by Mines’ students under the students’ contracts with Mines 

because (1) doing so interferes with Mines’ constitutional authority 

to exercise “exclusive control and direction” of its funds and 

appropriations; (2) doing so unconstitutionally taxes Mines’ 

students’ acquisition of education furnished by the State; (3) 

Sodexo’s sales of food to Mines under their contract are excluded 

 

3 Sodexo concedes that these sales are subject to the sales tax, and 

therefore they are not at issue. 

4 According to the Code, the purchase price is “the price to the 

consumer.” GMC § 3.02.10. The sales tax rate is “three percent of 

the purchase price.” Id. at § 3.03.10(a). The City claims that the 

student is the consumer, but the City doesn’t assess Sodexo based 

on the price to that consumer. Rather, it assesses three percent on 

the lower price Mines pays Sodexo. 
6 

from taxation under the Code as direct sales to Mines in its 

governmental capacity only; and (4) Sodexo does not sell food to 

students at retail, but instead sells food to Mines at wholesale, and 

the Code expressly exempts wholesale sales from taxation. Because 

we conclude that Sodexo doesn’t sell food to students at retail, and 

that the Code’s wholesale exemption applies to the sales Sodexo 

makes to Mines, we don’t address Sodexo’s first three contentions.5 

A. Standard of Review and Applicable Law 

¶ 12 We review an order granting summary judgment de novo. 

Hamon Contractors, Inc. v. Carter & Burgess, Inc., 229 P.3d 282, 290 

(Colo. App. 2009). We similarly review the interpretation of a 

municipal ordinance. See Friends of Denver Parks, Inc. v. City & 

Cty. of Denver, 2013 COA 177, ¶ 45; Leggett & Platt, Inc. v. Ostrom, 

251 P.3d 1135, 1140 (Colo. App. 2010) (construing tax ordinances, 

including a tax exemption provision). 

 

5 Sodexo urges us to decide this case on constitutional grounds, as 

do the other public institutions of higher education that have filed a 

brief as amici curiae. But we avoid constitutional analysis if we can 

resolve a case on statutory grounds. City of Florence v. Pepper, 145 

P.3d 654, 660 (Colo. 2006); see also Taxpayers for Pub. Educ. v. 

Douglas Cty. Sch. Dist., 2015 CO 50, ¶ 11, cert. granted, judgment 

vacated, and case remanded, 582 U.S. ___ (2017). 
7 

¶ 13 We construe such ordinances the same way we construe 

statutes, and so our ultimate goal is to determine and give effect to 

the municipality’s intent. Leggett & Platt, 251 P.3d at 1141; Waste 

Mgmt. of Colo., Inc. v. City of Commerce City, 250 P.3d 722, 725 

(Colo. App. 2010). To do this, we look first at the ordinance’s plain 

language. But we don’t look at the language in isolation: we must 

consider the language in context, looking to related provisions and 

construing them in a way that gives effect to all, in a harmonious 

way, if possible. Leggett & Platt, 251 P.3d at 1141; Waste Mgmt., 

250 P.3d at 725. 

¶ 14 If, after doing all this, we conclude that the ordinance’s 

meaning is clear, we won’t apply other rules of statutory 

interpretation. But if we conclude to the contrary — that is, that 

the relevant language is ambiguous — those other rules come into 

play. Leggett & Platt, 251 P.3d at 1141; Waste Mgmt., 250 P.3d at 

725. 

¶ 15 A couple of special rules guide our interpretation of tax 

provisions. 

¶ 16 First, as a general matter, we construe provisions purporting 

to impose a tax narrowly in the taxpayer’s favor. Associated Dry 
8 

Goods Corp. v. City of Arvada, 197 Colo. 491, 496, 593 P.2d 1375, 

1378 (1979) (“[T]axing powers and taxing acts will not be extended 

beyond the clear import of the language used . . . .”); Coors Brewing 

Co. v. City of Golden, 2013 COA 92, ¶ 18; Noble Energy, Inc. v. Colo. 

Dep’t of Revenue, 232 P.3d 293, 296 (Colo. App. 2010). This first 

rule requires us to resolve all doubts regarding imposition of a tax 

against the taxing authority. Associated Dry Goods, 197 Colo. at 

496, 593 P.2d at 1378; Noble Energy, 232 P.3d at 296. 

¶ 17 Second, we construe tax exemptions narrowly in the taxing 

authority’s favor. Catholic Health Initiatives Colo. v. City of Pueblo, 

207 P.3d 812, 817-18 (Colo. 2009); Coors, ¶ 18. This second rule 

requires us to resolve all reasonable doubts about whether an 

exemption applies against the taxpayer. Catholic Health Initiatives, 

207 P.3d at 818; Coors, ¶ 18; Noble Energy, 232 P.3d at 296. And 

the taxpayer has the burden of clearly establishing that the 

exemption applies. Catholic Health Initiatives, 207 P.3d at 817. 

B. Analysis 

¶ 18 Section 3.03.010(a) of the Code provides that a three percent 

sales tax “is levied . . . upon all sales of tangible personal property 

and services specified in subsection 3.03.030(a).” As relevant for 
9 

our purposes, “sales of food, prepared food, or food for immediate 

consumption” are taxable sales. GMC § 3.03.030(a)(4). 

¶ 19 Under the Code, “sale means the acquisition for any 

consideration by any person of tangible personal property or taxable 

services that are purchased.” GMC § 3.02.010. And the Code 

defines “gross sales” as “the total amount received in money, credit, 

property or other consideration valued in money for all sales, leases, 

or rentals of tangible personal property or services.” GMC 

§ 3.02.010 (emphasis added). The plain language of the Code 

therefore limits taxable sales to exchanges where the one providing 

the tangible item receives consideration for the exchange. 

¶ 20 In concluding that Sodexo makes meal plan sales directly to 

students, the district court erroneously determined that a sale 

occurs when a student swipes her BlasterCard. No sale by Sodexo 

occurs in that circumstance because, under the Code, a sale 

requires the receipt of consideration for the exchange, see GMC 

§ 3.02.010, and a student doesn’t give consideration to Sodexo (or, 

arguably, to anyone else) when she swipes a BlasterCard to obtain a 

meal under the meal plan or with Munch Money. 
10 

¶ 21 The relevant contracts and undisputed facts show that 

consideration is exchanged for food on two occasions: once when a 

student pays Mines for a meal plan or Munch Money, and again 

when Mines pays Sodexo periodically based on the number and 

types of meals provided to students pursuant to the students’ 

agreements with Mines. As noted, the meal plans and Munch 

Money are “use it or lose it” propositions. The student can’t get a 

refund from Mines if she uses less than what she has already paid 

for. So the student isn’t truly paying anything when swiping a 

BlasterCard; she is merely reducing the number of meals she can 

obtain in the future under her meal plan. Certainly she is paying 

nothing to Sodexo. Simply put, when a student uses a BlasterCard, 

she and Sodexo aren’t engaging in a buyer-seller transaction. 

¶ 22 As no sale by Sodexo occurs under the Code (as construed 

narrowly in favor of the taxpayer) when a student swipes a 

BlasterCard, Sodexo can’t be responsible for sales tax for any such 

transaction. See GMC § 3.03.010. 
11 

¶ 23 To be sure, sales occur under the Code when Mines pays 

Sodexo for meals.6 But what kind of sales are they? If they are 

wholesale sales, as Sodexo contends, they are exempt from taxation 

under subsection 3.03.040(a)(13) of the Code, which says that “[t]he 

sales tax . . . shall not apply to . . . [a]ll wholesale sales.” We agree 

with Sodexo that this exemption clearly applies to its sales to 

Mines. 

¶ 24 We begin, as we must, with the Code’s definition of wholesale 

sales. Such sales are “sales to licensed retailers, jobbers, dealers or 

wholesalers for resale.” GMC § 3.02.010.7 Sodexo sells meals to 

Mines, a licensed retailer. And Mines resells them to students at 

prices significantly higher than Sodexo charges it under its contract 

 

6 Given that the City has thus far only sought to tax the 

BlasterCard swipe transactions, we arguably don’t need to 

determine whether the parties’ contractual relationships give rise to 

any other taxable sales. But we do so out of an abundance of 

caution, and because the City’s assessment is based on the prices 

Mines pays Sodexo. 

7 The Code also distinguishes wholesale sales from “retail sales” 

(defined as “all sales except wholesale sales”) in the way it defines 

“retailer”: “any person selling . . . tangible personal property . . . at 

retail.” GMC § 3.02.010. As discussed, Sodexo doesn’t sell to 

students at all, and it doesn’t sell to Mines at retail. Mines, on the 

other hand, sells to students at retail. 
12 

with Sodexo. So Sodexo’s sales to Mines meet the Code’s definition 

of wholesale sales. See also P.H. Collin, Dictionary of Business 474 

(3d ed. 2001) (a wholesaler “buys goods in bulk at a wholesale 

discount”). 

¶ 25 The City’s reliance on Sodexo’s delivery of the meals to 

students misses the mark. Though Sodexo also provides the service 

of delivering the meals to the students, it does so in Mines’ stead. 

The meals, under the express terms of the contract, are Mines’ 

property. And that is no less so just because Mines itself doesn’t 

physically receive the meals.8 

¶ 26 Even less appealing is the City’s argument that because Mines 

is not the “ultimate consumer” of the meals, Sodexo can’t be a 

wholesaler. By definition, sales to end users are not wholesale 

sales. See GMC § 3.02.010 (“Sales by wholesalers to consumers are 

not wholesale sales.”); see also Black’s Law Dictionary 1832 (10th 

ed. 2014) (defining “wholesale” as “[t]he sale of goods or 

commodities usu[ally] to a retailer for resale, and not to the 

ultimate consumer”); Encyclopedia of Small Business 1323 (Virgil L. 

 

8 The City fails to cite any authority for the proposition that a sale 

can’t qualify as wholesale unless the purchaser takes physical 

possession of the goods. 
13 

Burton III ed., 2011) (defining “wholesaling” as “the selling of 

merchandise to anyone . . . other that the end consumer of that 

merchandise”). So the fact Mines isn’t the ultimate consumer of the 

meals it buys from Sodexo actually supports Sodexo’s position.9 

¶ 27 In sum, we conclude that Sodexo’s sales to Mines are 

wholesale sales under the plain language of the Code’s exemption. 

Of this we have no reasonable doubt. 

¶ 28 Though we rely on the plain language of the exemption as 

applied to the undisputed facts, we might be remiss if we failed to 

examine the issue using a test formulated by the supreme court to 

determine whether a sale is a wholesale sale. 

¶ 29 In A.B. Hirschfeld Press, Inc. v. City & County of Denver, 806 

P.2d 917 (Colo. 1991), the court, interpreting tax provisions of the 

Denver Municipal Code that are substantially similar to those at 

issue in this case, held that a wholesale purchase occurs if “the 

primary purpose of the transaction is the acquisition of the item for 

resale in an unaltered condition and basically unused by the 

 

9 That the contract between Sodexo and Mines doesn’t use the word 

“wholesale” is, contrary to the City’s argument, immaterial. The 

substance of the transaction is what matters, and nothing in the 

Code requires the taxpayer to formally label its transactions 

wholesale. 
14 

purchaser.” Id. at 921; see also Coors, ¶ 21 (applying this test to 

the GMC’s wholesale exemption). Mines doesn’t alter or use the 

meals provided to students, and the economic reality of the parties’ 

relationships is that Mines acquires the meals to resell to its 

students at a higher price. It follows that Sodexo’s sales to Mines 

are wholesale sales under the primary purpose test.10 

¶ 30 Decisions from other jurisdictions also support our conclusion 

that Sodexo makes wholesale sales. In Slater Corp. v. South 

Carolina Tax Commission, 242 S.E.2d 439 (S.C. 1978), for example, 

the South Carolina Supreme Court interpreted an almost identical 

statute under practically identical facts. In that case, 

[t]he students contracted with and paid the 

colleges, not [the food service supplier], for the 

meals. The colleges, in turn, contracted with 

and paid [the food service supplier]. The 

colleges, not [the food service supplier], 

determined who should be entitled to purchase 

meals at the dining hall, and if a refund was 

given, it came from the college, not from [the 

food service supplier]. 

 

10 The court in A.B. Hirschfeld Press, Inc. v. City & County of Denver

identified a number of factors a court may consider in this context. 

806 P.2d 917, 921 (Colo. 1991). They don’t support the City’s 

position in this case, and indeed the City doesn’t make any 

argument along those lines. 
15 

Id. at 440.11 Therefore, the court concluded, “[t]he meals in 

question were clearly purchased for resale with the students buying 

their food from the colleges rather than from [the food service 

supplier].” Id.

¶ 31 In so holding, the Slater court drew from a Fifth Circuit case, 

Hodgson v. Crotty Brothers Dallas, Inc., 450 F.2d 1268, 1281 (5th 

Cir. 1971), holding that a food service supplier on school premises 

qualified as a “retail establishment” pursuant to the Fair Labor 

Standards Act (FLSA). The Fifth Circuit’s holding in Crotty Brothers

rested on the FLSA’s definition of “retail or service establishments,” 

which expressly included catering services. Id. at 1280. But in its 

analysis of the question, the court recognized the wholesale-like 

nature of the types of transactions in that case, this case, and 

Slater, noting, “even though no completed meals ever passed from 

[the caterer] to the school, it would seem more reasonable to 

characterize the transactions involving [the caterer], the school, and 

 

11 Mines gives no refunds. 
16 

the students as sales for resale than as sales directly from [the 

caterer] to the students.” Id.12 

¶ 32 Hodgson v. Prophet Co., 472 F.2d 196 (10th Cir. 1973), on 

which the City relies, is distinguishable. In that case, the court, 

like the court in Crotty Brothers, held that a food service supplier 

that contracted with a college to serve students qualified as a “retail 

and service establishment” under the FLSA. Our case is not, of 

course, an FLSA case; we construe materially different tax 

provisions. And, in any event, the Tenth Circuit relied on aspects of 

 

12 Our determination also adheres to the more general principle we 

follow when interpreting tax provisions, as articulated by the 

Supreme Court in Frank Lyon Co. v. United States: 

Where, as here, there is a genuine multipleparty transaction with economic substance 

that is compelled or encouraged by business or 

regulatory realities, that is imbued with taxindependent considerations, and that is not 

shaped solely by tax-avoidance features to 

which meaningless labels are attached, the 

Government should honor the allocation of 

rights and duties effectuated by the parties 

. . . . [T]he form of the transaction adopted by 

the parties governs for tax purposes. 

435 U.S. 561, 562 (1978). The City doesn’t even allege that the 

transactions at issue are structured solely (or at all) as a taxavoidance scheme. 
17 

the contract before it that differ in important respects from the one 

before us. As the court explained,

All the college did . . . was to collect from each 

boarding student . . . the amounts the contract 

stipulated [the food service supplier] was 

entitled to receive . . . and remit the same to 

[the food service supplier]. In other words, all 

the college did was to act in the role of a 

collection agent, rather than a purchaser. 

Id. at 204. The contract in that case “provided that [the food service 

supplier] should charge boarding plan students . . . $1.68 each per 

day . . . and that the college should remit the aggregate of such 

charges collected by it from boarding plan students monthly to [the 

food service supplier].” Id. at 199-200 (emphasis added). 

¶ 33 In contrast to the terms of that contract, the contract between 

Sodexo and Mines stipulates that Mines will purchase from Sodexo 

all of the meals it requires to fulfill its contractual obligations to its 

students, after Mines alone determines the prices and terms of 

those plans. And Sodexo doesn’t charge students. Further, the 

food service supplier in Prophet Co. contracted to “operate on its 

own credit and at its own risk of loss,” id. at 206, whereas, in this 

case, only Mines, not Sodexo, bears the risk of loss if a student fails 

to pay for her meal plan. 
18 

¶ 34 Lastly, we acknowledge that our holding conflicts with the 

division’s holding in City of Golden v. Aramark Educational Services, 

LLC, 2013 COA 45. But with all due respect to the division, we 

disagree with its analysis. In Aramark, the division held that 

although “both parties have presented several tenable arguments,” 

“Golden’s arguments are sufficiently tenable as to create reasonable 

doubts that [the food service supplier] is entitled to the wholesale 

sales exemption.” Id. at ¶¶ 32, 36. The division stopped there, 

declining to determine which of the parties’ “tenable” arguments 

was correct. 

¶ 35 A “tenable” argument — that is, a merely nonfrivolous or 

defensible argument — isn’t necessarily a correct one. Though 

we’re required to construe tax exemptions narrowly, resolving all 

reasonable doubts against the taxpayer, we don’t think that means 

that a taxing entity’s assertion of a nonfrivolous argument for 

refusing to apply an exemption can, entirely on the basis of having 

been articulated, carry the day. Rather, we must resolve the 

meaning of the provision to ensure that a taxpayer isn’t subjected to 
19 

a tax that, under the correct interpretation, it has no legal 

obligation to pay.13

¶ 36 The City’s argument in this case is “tenable” but incorrect. 

Under the plain language of the Code, Sodexo makes wholesale 

sales to Mines; Sodexo doesn’t make direct sales to students who 

use BlasterCards. Therefore, under the Code, the City can’t assess 

sales tax against Sodexo. 

III. Conclusion 

¶ 37 The judgment is reversed, and the case is remanded for entry 

of judgment for Sodexo and for any other proceedings consistent 

with this opinion. 

JUDGE GRAHAM and JUDGE WELLING concur. 

 

13 We also observe that no other Colorado appellate case has taken 

this “tenable argument” approach, which treats the mere assertion 

of a nonfrivolous argument as dispositive. In fact, in Coors Brewing 

Co. v. City of Golden, 2013 COA 92, the division subsequently 

construed the same wholesale exemption without using that 

approach.