Broadway Services v. Comptroller
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The Court of Appeals reversed the judgment of the tax court reversing the decision of the Comptroller of Maryland denying Broadway Services Inc.'s request for an offset and refund of the taxes it paid to cleaning supply vendors, holding that the tax court erred.
Under contracts between three non-profit tax-exempt hospitals of the Johns Hopkins Health System and Broadway, a for-profit business, Broadway provided management services to the hospitals, including purchasing and providing cleaning supplies for the use of he hospitals' janitorial staff. Broadway filed a request for an offset and refund of the taxes it paid to cleaning supply vendors, asserting that Broadway was tax exempt because it was reselling the cleaning supplies. The Comptroller denied the refund. The tax court reversed, concluding that because Broadway acted as the hospitals' agent it should not have been charged sales tax. The Court of Appeals reversed, holding that the tax court erroneously conducted its agency analysis as a matter of law.
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