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B&H Responds to N.Y. Tax Evasion Lawsuit
21 November 2019
B&H Photo spokesperson Jeff Gerstel released a statement today in response to the lawsuit filed by New York Attorney General Letitia James last week alleging the New York City retailer knowingly failed to pay sales tax on millions in receipts from manufacturers tied to instant rebates.
Text of the statement follows:
The Attorney General is trying to create a new tax on discounts to make New Yorkers pay more. The Attorney General wants consumers to pay sale tax for what they actually pay plus an additional tax on discounts they receive. This makes no sense and there is no law that requires consumers to pay this tax on discounts.
These claims are without merit; the entire consumer electronics retail industry takes the identical approach that we do.
B&H has done nothing wrong and it is outrageous that the Attorney General is attacking 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 will fight these allegations aggressively.
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 New York State Department of Taxation and Finance has done countless audits and never once -- not a single time -- mentioned any issue with this widespread retail industry practice.
The Attorney General's investigation and subsequent lawsuit arose from a qui tam lawsuit filed under seal by a whistleblower. The press release announcing the law suit claimed:
Today's lawsuit, filed in New York State Supreme Court, concerns B&H's 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 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 case is being handled by Assistant Attorney General Laura Jereski of the Taxpayer Protection Bureau with the support of senior legal support analyst Bianca LaVeglia.