AG Letitia James Sues B&H Foto For Allegedly Defrauding New York Out Of Millions In Sales Tax

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NEW YORK (VINnews) – New York Attorney General Letitia James today filed a lawsuit against B&H Foto & Electronics Corp. (B&H) for alleged violations of New York’s Tax Law, the New York False Claims Act, and New York’s Executive Law. The suit claims that B&H — the nation’s largest non-chain photo and video equipment retailer — knowingly failed to pay sales tax due on tens of millions of dollars it received from electronics manufacturers to reimburse the company for “instant rebate” manufacturer discounts B&H passed along to its customers.

“B&H proudly claims that it puts principles over profits, but for 13 years, the company actually chose profits over principles by defrauding New York taxpayers out of millions of dollars owed to the state,” said Attorney General James. “B&H deliberately chose not to pay the sales tax it knew was due to New York State in order to gain a competitive edge over companies that chose to follow the rules. No company is above the law, which is why my office filed this lawsuit, and will do so against any company that tries to skirt its responsibilities by illegally trying to tilt the playing field.”

Today’s lawsuit, filed in New York State Supreme Court, concerns B&H’s alleged failure to pay taxes on “instant rebates,” which are point-of-sale discounts the company offers its customers, for which it receives reimbursement from manufacturers. While these arrangements are subject to New York State sales tax, B&H allegedly never paid that tax, despite its repeated and explicit acknowledgements — internally, to outside vendors, and externally, to a competitor — that under New York tax law, it owed sales tax on these reimbursements. The lawsuit alleges B&H violated the state’s Tax Law and the New York False Claims Act. Attorney General James is seeking treble damages, penalties, and interest to redress these violations.

The Attorney General’s investigation and subsequent lawsuit arose from a qui tam lawsuit filed under seal by a whistleblower. The New York False Claims Act permits whistleblowers who know of information concerning false or fraudulent conduct that victimizes the state through the failure to pay taxes to bring an action on behalf of the government.

Readers are advised that the allegations contained in this lawsuit are just that, merely allegations, which often can be explained by the company in question.

The complaint can be read in full below
2019.11.14_nyag_v._bh_-_summons_complaint

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46 COMMENTS

  1. Well, I was always told that retailers “Collect” sales tax, they don’t “Charge” sales tax. So the worst thing B&H did, was it failed to collect from customer a portion of the “after the sale” sales tax. That does not give a company a competitive edge, as consumer does not know difference until paying. This is a far cry from “failed to pay sales tax” that the AG is parroting, which would mean it collected the tax, and failed to pass it to the City.

    • If a $500 item is reduced to $400 because the store is subsidizing that $100 discount, then the customer pays $400 plus sales tax on $400 (which, as you correctly noted, the merchant collects from the customer and remits it to the state),
      However, if the merchant is reimbursed for that $100 discount, then the customer pays $400 plus the sales tax on $500 (and the merchant is then required to remit that full tax on the full $500 to the state).
      If the customer is not being asked to pay the sales tax on the discounted amount then they may artificially be getting a better deal than they might have gotten elsewhere.

    • You are not a Chuchem. Retailers “collect” sales tax, they don’t “charge” sales tas. Git gezugt. “failed to pay Sales Tax that the AG is parroting” The Ag Is correct. Read your first sentence “Retailers COLLECT’ BH failed to collect part of it and failed to pay it. I am not sure if its criminal or not but it can cost 100’s of millions in Taxes and penalties.

    • Its easy for you Mr John Smithson. Jews (Cohens, Greens, Shapiros, Kleins etc) are not exactly welcomed in Louisiana, No Dakota, Wyoming, Kansas, Missisipi, West Virginia, South Carolina and every single Trump voting Republican States. We can easily mingle and survive with blacks, Latinos, immigrants and (surprise) even Muslims in Liberal Democrat voting Sanctuary Cities. In fact less than 1% of Orthodox Jews live in those States. This is a worldwide phenomenon. 90% of Orthodox Jews live in 2 country’s (out of 200) Israel and the USA. Israewl Our Country. 90% are immigrants. The USA is similar. More than 1/2 of the Population Immigrants. (Concentrated mostly in the Sanctuary Cities) Hopefully one day we will feel comfortable in Trumpist/Republican Cities. First you will have to embrace the immigrants and other minorities before we can trust you with our lives.

  2. @Chacham; I suspect you do not understand the issue.

    In general, firms like B and H have been fighting for years for an even playing field vs firms online that claim to be exempt from sales tax. Trish suing the one NY sales tax paying firm over a negligible bookkeeping issue is rich.

  3. The statement made by the AG that B & H owes “millions” of dollars to NY State is misleading. The article clearly states that the AG claims that B & H failed to pay sales tax on “tens of millions of dollars” worth of sales. That is not the same as owing millions of dollars in taxes.

    First of all B & H did pay sales tax on those sales , but they paid it on the net amount of the sale after the manufacturers rebate instead of the gross amount before the rebate. So the amount owed is not the tax on ten millions of dollars of sales, but rather the sales tax on the rebates on those sales, which should be considerably smaller amount.

    Secondly, The sales tax rate in NY city is 8.875%, which would come out to $877,500 on ten millions dollars. This would be the maximum owed by B & H; a far cry from the amount of tax not paid by Walmart or Amazon on its online sales EVERY SINGLE DAY! But of course Jews are and have always been low hanging fruit.

    • “The statement made by the AG that B & H owes “millions” of dollars to NY State is misleading. The article clearly states that the AG claims that B & H failed to pay sales tax on “tens of millions of dollars” worth of sales. That is not the same as owing millions of dollars in taxes. ”

      Uh – yes it is. Taxes on “tens of milions in sales” comes out to millions in taxes.

      • Did you read my entire comment, or did you just stop after the first paragraph? I specifically showed the calculation that in the worst case scenario B & H would owe less than one million dollars .

    • I know right? What frum person in their right mind would vote for a person who wants to enforce the laws of the land? How else can we lie, cheat and steal from the government if we keep voting in these people and thier pesky law enforcement. After all, one of the ten commandments is “do not vote for someone who will go after you for stealing”. Its right after the commandment of “do not steal”

      • Enforce the laws of the land? LOL!! James is repeatedly representing and defending illegal aliens/foreigners who violate the laws of the land and dont even pay state income taxes while going after legitimate New York businesses who have done nothing wrong. She is a racist anti-Semite who hates America and will do anything to destroy it.

  4. About as legit a whistleblower as the one that ignited the fire under Schiff’s and Pelosi’s backsides. What a bunch of hooey. B&H enriches the city’s coffers with millions in tax dollars and as a major tourism magnet. Will she and Cuomo applaud when B&H packs up and moves to another state? Will they shriek like petulant children “don’t let the door hit you on the way out?” The AG’s move is clearly motivated by malice and envy. If she thinks she is scoring big time on her resume, she should think again. She is messing with a Higher Power. Preet what’s-his-name also thought he scored big. Until he tumbled off his high horse. P.S. The owner of B&H is as straight-laced as they come. And if tzedaka and chessed protects one from evil forces, B&H will triumph in the end. Just you watch.

  5. The state is broke collections in taxes billions down a doer governors own words
    So start charges against cash cows it’s cheaper yo settle even if not guilty then defend yourself and go thru a trail

  6. Will tish reimburse B&H for all their legal fees that they will incur as a result of her picking on them? This is just disgusting. I was at a function where our frum politicians called her their sister,, lets see what they have to say now!

  7. If you vote for anti business liebral democrat this is the tzarus us jews will get. My guess is she is alos mad that the male and femnale workers don’t mix, no gender neutral bathrooms. and of course males have higher positions than females. All the nonsense liberal agenda garbage

  8. Again and again we see the same politicians that our community leaders chose for us to vote for come back to bite us badly , including this AG Letitia , Mayer Deblasio etc. , It’s just showing that those who claim to represent our community and go to the rabonim to endorse certain candidates have their own agendas and not the communities best interest .. SAD

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