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.
Of course you know that “those Jews” would evade our taxes.
If it’s not true they should definitely issue a lawsuit for prejudice… Hope they do..
The manufacturer was reimbursing B&H every single time that they’re selling with discount, so they’ve should pay the tax of the full amount.
Today’s Crain’s article: “Tim Noonan, a state-tax expert at law firm Hodgson Russ, said the case could hinge on whether B&H offered customers a manufacturer’s coupon, which requires it pay the state sales taxes based on the full price of merchandise. A retailer’s coupon, however, requires merchants to collect taxes based on the price paid by a customer. “Based on B&H’s argument, they must believe they have a retailer’s coupon program,” Noonan said.” So it’s just all about terminology? If the rebate is passed through to the customer, and applied at the time of sale, why should it be taxable?… Read more »
There is a difference thougb. A manufacturers coupon means the manufacturer reimburses the retailer for the value of the coupon. The funds they send them are taxable at time of purchase. If it’s a retailers coupon its just a discount the retailer gives to the customer directly and doesnt get reimbursed. Manufacturers coupons being under the obligation to pay sales tax is established law. Read the indictment. A lot of what they are saying in the memo is just not true according to the evidence the AG has. Im not arguing whether this law is right or just but it… Read more »
An instant savings offer is not a manufacturers rebate that the customer receives. What ‘evidence’ does the AG have saying otherwise?
This sounds like a setup.
The practice has held up with all the accountants through out the years, it was assumed then to he legal and apparently many other stores did the same under that assumption. The owner depends on their accountants to understand these particulars I would assume. If the AG is now coming forward and claiming there was a error, then can’t the lawyers for B and H assist Ms James have to include the other stores as Well?
But ‘Ms James’ appears to have an agenda. Probably someone with a similar agenda slandered the company and she ran with it. I also doubt that she has experience in or understands the particulars and that it would be useless enter into a legal discussion of sales tax and rebates. They would have to appeal and seek other legal avenues.
Not that I’m promoting she should but that could make the case that they are being singled out and the charges aren’t sincere.
I feel bad for Leticia. No one told her Satmar is a voting block??
She’s singling out Jews in this case. Not Satmar. She’s also dead wrong. Everyone knows the reputation of B &H. They’re squeaky clean.
The article has an error. B&H is not just closed on “most” jewish Holidays. It is closed on every single one on the calendar. Close to 80 days a year the store in Manhattan and the online store close. Shmiras Shabbos at its best.
Is the AG a reletive of Nancy Pelosi, or that hack who jailed SB Rubashkin, or Amalek, perhaps?
Take off the denial blinders and take a good look back at her long history. Do you expect anything but an attempt to target a large religious company? Nothing good has ever come out of that element of crown heights. I can think of many much more qualified people for the job of NY Attorney General. Voted in for the wrong reasons in the declining New York City. This is a travesty.
If you buy an item, such as a camera from Costco and there is a manufacturer’s discount on it, they charge full tax on the camera before discount, even though you don’t pay the full price. Shoprite does the same thing. and now NYC charges sales tax, even if you buy the item from overseas.
If you read the whole 35 page (!!) lawsuit, the reasons to some earlier comments become clear. 1) there was a whistleblower who came forward in 2016, that was the reason the began investigating. So even if everyone else is doing it, here was proof HOW b&h was doing it 2) there are quotes from emails of the high-ups that they clearly knew about it and looked to get around it. Sounds very much like the higher ups that I knew and dealt with on a daily basis. 3) While there certainly could be some bias, because I mean, Jewish… Read more »
If you are trying to lend credibility to your accusation by identifying yourself as a ‘former employee’, then lend credibility to your identity by stating your name and why you are a ‘former’ employee.
Seems to me this is which hunt ,anti semitism .
She should be fired
When does this big government stop, when is enough enough. Trying to tax people for dollars not spent. Move out of New York.