NEW YORK (VINnews) — B&H has issued a statement in response to the announcement by AG Letitia James of a NYS lawsuit against them.
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The statement sent out to their staff reads as follows:
Dear B&H Employee,
Today the NY Attorney General filed suit against B&H claiming that we should have collected sales tax from customers on instant savings discounts. We obviously believe these claims are without merit, especially since the entire consumer electronics retail industry takes the identical approach that we do. B&H will fight these allegations aggressively. It’s unbelievable to me that the Attorney General has singled out B&H and is misleading the public about our company, while ignoring the identical practices from much larger competitors.
We issued the following statement to the press:
“The Attorney General is flat wrong – and is trying to create a tax on discounts in order to make New Yorkers pay more. B&H is not a big box store or a faceless chain; we are a New York institution, having operated here for nearly 50 years with a stellar reputation. The tax department has done countless audits and never once – not a single time – mentioned this widespread industry practice.
“B&H has done nothing wrong and it is outrageous that the AG has decided to sue a New York company that employs thousands of New Yorkers while leaving the national online and retail behemoths unchallenged. The Attorney General wants to charge New Yorkers a tax on money they never spent. It’s wrong and we won’t be bullied.”
We regularly offer customers instant savings discounts. This is an industry wide practice. On a camera that regularly sells for $1,000 that has an instant savings offer of $200, the net selling price is $800 and we collect and remit sales tax on the $800. The Attorney General is claiming that we should collect tax based on the $1,000 and thus have underpaid sales tax for 13 years. Common sense, legal precedent, and years of sales tax audits approving our practice say we have done everything right.
I want each of you to know that B&H acts with the highest standards of integrity in everything we do, and I find this action offensive and very disappointing. I look forward to having our day in court to defend ourselves and our customers against these absurd allegations.
If you have any questions or receive any outside inquiries, please direct them to Jeff Gerstel or David Eisenberg.
Let’s make sure we commit 100% of our energy to serving our customers, as we always do, and exceeding their expectations every day. Please do not allow this frivolous lawsuit to create any distraction from our mission of treating our customers right.
Thank you,
Menashe Horowitz
Sounds like anti semitism to me. Why did anyone vote in this AG????
she was endorsed by the ultra liberal progressive “DAAS TORAH” @FLATBUSHGIRL
The AG is corrupt she ran on taking down the President by investigating to look for a crime just like the Soviets, she probably going after B&H because they are frum Jews and frum Jews support Trump.
If you read the complaint, the allegations are that B&H di not pay tax on the rebates that manufacturers provided B&H. Hence, If B&H sold a $ 1000.00 camera for $800 but the manufacturer gave a $200 rebate then B&H received $1000.00; $800 from the customer and $200 from the manufacturer. B&H did not reduce the price to $800.00. The payment stream was just split between the purchaser and the manufacturer. B&H received a $1000.00 in income They were supposed to pay the sales tax on $1000.00 not $800.00. New York State is very aggressive when it comes to sales tax. This is not a liberal or conservative this was a business decision to increase profits. Please let’s not bring out the anti-semitism claim until more is known.
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Well we from Jews voted for her, it was a mitzvah, daas Torah.
what about Amazon and all others that give discounts to people? are they required to pay tax on the discount dollars that no one got? sounds like an invention of another Latita Bitcoin ??????
This should be dismissed because the state did not get the companies name right, claiming they are B&H FOTO instead of B&H PHOTO.
“What about Amazon” Its up to the DA who to go after. Republicans investigate Hillary, Democrats investigate Trump. This is how it works. Millions in NY brake the Law a single day. Drive over the speed limit (dont report full income etc) you can prosecute so much, maybe 1 %. Amazon is good to the Liberals (He owns Washington Post) Orthodox Jews are no longer vote for Dems. Just a few days ago they had a fundraiser for Trump. Helllllo??
Trump singled out Sanctuary Cities like NY for eliminating SALT tax deduction. They will get the money from wherever they can. This is only the beginning. Wait for the RE Tax increases. A Brooklyn house is worth avg 1.5 million . Taxes? maybe 10-15.000 or Under 1% All around the USA RE Tax Avg 2-3% So get ready to a 200-300 % increase in your Real Estate Tax Bill in a few years. The net result will be a huge HUGE reduction of home values in NYC. In fact it already started under Trump in the last 3 years. It will accelerate fast.
All the askanim endorsed her AND de blasio because THEY make money on this
This is the law:
Manufacturers’ rebates
Manufacturers’ rebates (e.g., a rebate on the purchase of a car or an appliance) are not deductible from the amount of the taxable receipt. This is so whether the rebate is assigned to or paid to the seller at the time of sale, or later paid directly to the purchaser by the manufacturer. Even though the purchaser’s out-of-pocket expense is reduced by the amount of the rebate, the price paid to the seller is not. In effect, the manufacturer is subsidizing the consumer’s purchase, and the full sales price is subject to sales tax.
The A.G. is clearly using B&H as the first step to a wider collection effort for all cameras since they never go on sale, they just have “instant rebates”.
Tish James is not an enemy of Jews . She might have a legitimate point .
The AG does not get the PICTURE. She needs to buy newer lenses and better equipment at B and H. With no rebate.
But when other people broke the law by selling stuff in the subways and they got arrested everybody says “they haven’t harmed anyone” Do they pay the sales tax on what they sell?
The rebate should be considered as reducing the cost of goods sold for the camera already in inventory at a higher price. Its semantics to say its a rebate. What if the manufacturer just decided to lower the price, what will the AG try to collect then? NY is collectively trying to drive a great company out of business. There is only so much litigation and settlement nonsense they can take. Its a tough business to be in without the constant shake downs.
I wonder what B&H is. Maybe that cigarette brand, Benson & Hedges.
Anon, I get that its manufacturer driven and usually is the same sale at multiple retailers. The end result is that B&H gets the rebates for the period when the sale is in effect and that reduces the cost of the item, essentially that savings is passed on to the consumer. If NY succeeds here, manufacturers and retailers will find a work around. It is not fair to ask a consumer to pay tax on the msrp price if that’s not what they paid. It’s also not fair to ask the retailer to pay that tax when for a limited period of time, the manufacturer decided to lower the market price and increase sales. Instant rebates are a marketing gimmick even if money is obtained from the manufacturer by the retailer corresponding to that “rebate”. They will just process a sales bonus instead or some other legal manuver. The only people this lawsuit helps are the lawyers, certainly not tax payers. Let these people work on their business, they do a great job. They drove the B&H warehouse out of NY, prevented Amazon from coming, how many more jobs do they want NYers to lose? What crazy person would open a business with these crazy politicians in charge?
You all realize that the AG doesn’t go out and find cases, right? That some higher up like someone in the governor’s office hands her the case to investigate and prosecute? So quick to call her names, when she’s only doing the job that was given to her. The AG is the state’s attorney. Cases are handed to that office.
The act is probably technically illegally but it’s been done so much, that it’s probably become industry practice. But then someone realized there is available money for the government that isn’t being collected. Saying everyone does it won’t help. This is probably being set up to be a test case to set the example, so the government can go after bigger businesses. This may have even come as a federal directive to find a case to try to establish the proper law, and what better place to start than New York?
This is pure anti capitalist garbage. Plus targeting a frum company gives it added “street cred” for these business hating leftists that never created anything of value in their lives. Leftist bureaucrat aparatchniks of the capitalist hating city of NY. How much can people take before all the wealth creators leave and the city is left to the parasitic class. President Trump left for good reason. To save millions on taxes by moving to florida
I have paid sales tax on the original (pre-discounted) price on items I’ve purchased online elsewhere. This is something that is sometimes noted and sometimes not but the letter of the law appears to be that sales tax on the pre-discounted price is required. Specifically if the customer is not informed prior to sale that the discount is a manufacturer-funded rebate then the store is required to pay the sales tax; otherwise they may collect the tax from the customer or pay it themselves – that’s up to the store.
But the problem is that sales tax is a regressive tax. A poor person must pay the same sales tax on an item as an ultra rich person. A better way of raising tax dollars would be to increase progressive taxes – personal and corporate income tax, real estate tax, capital gains tax, wealth tax, and “luxury” tax. Unfortunately such taxes has been fought tooth and nail by the “one percent” and those who mistakenly consider themselves in that class, so we are left with the regressive sales tax. Money has to be raised to pay for the things that we (most of us) want, like a well-trained and well-equipped police, fire, ambulance forces; good schools for our (and our neighbors’) children; medical care for those who can’t afford to die for lack of treatment; and even the cost of holding free elections so that our better impulses can be made real in this society.