NY sues B&H for alleged tax fraud
NEW YORK - The state of New York is suing famed New York electronics retailer B&H Foto & Electronics Corp. (B&H) for allegedly failing to pay sales tax on tens of millions of dollars.
Attorney General Letitia James says that B&H knowingly failed to pay sales tax on money it received from electronics manufacturers to reimburse the company for “instant rebate” manufacturer discounts B&H passed along to its customers.
The New York City-based company, the nation’s largest non-chain photo and video equipment retailer, vehemently denies the charges.
In a statement to FOX 5 News, Jeff Gerstel, a spokesperson for B&H said, "The Attorney General is flat wrong – and is trying to create a tax on discounts in order to make New Yorkers pay more."
The suit claims the fraud took place over a 13 year period.
The lawsuit, filed in New York State Supreme Court, concerns what the state claims is B&H’s failure to pay taxes on money from are point-of-sale discounts the company offers its customers, for which it receives reimbursement from manufacturers.
Gerstel tells FOX 5 News: "The tax department has done countless audits and never once – not a single time – mentioned this widespread industry practice."
New York State says sales tax is required on that money but claims that B&H never paid the tax, despite its repeated and explicit acknowledgments — internally, to outside vendors, and externally, to a competitor — that under New York tax law, it owed sales tax.
The state is seeking damages, penalties, and interest from B&H.
The Attorney General’s investigation and subsequent lawsuit came from a whistleblower complaint.
B&H says it has operated in New York for 47 years and employs thousands of New Yorkers.
It says it "won't be bullied" by the attorney general's office.