By Kalman Heitman
New York photography and video equipment retailer B&H is refuting a lawsuit filed by NY Attorney General Letitia James claiming they failed to pay millions of dollars in sales tax.
The suit alleges that, since 2006, B&H has offered “instant rebate” deals to customers. Under those deals, a manufacturer offers to reimburse a company that sells its products at a discount, but the company still has to pay taxes on the full, undiscounted price of the item.
B&H CEO Menashe Horowitz has released a statement on Thursday that they believe these claims are without merit and denying any wrongdoing.
In a letter to employees, reported by Yeshiva World News, Horowitz wrote, “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.
“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.”
They also 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.”
B&H is owned by Herman Schreiber, and many of the store’s employees are Orthodox Jews. The store is closed on Shabbat and most Jewish holidays.