CASE DISMISSED! Judge Throws Out Massive Case Against B&H Photo — Lawsuit From NY A.G. James Said They Owed “Millions In Taxes”

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A New York state court dismissed a $7.3 million tax whistleblower suit brought by the state attorney general against Manhattan-based B&H Foto, finding the photography retailer’s “instant savings” program transactions aren’t manufacturer coupons subject to sales tax.

James’ office accused the photo and video equipment retailer in 2019 of failing to pay at least $7.3 million in sales and use taxes on $67 million in so-called instant savings reimbursements from 2006 to July 2017.

In November 2019, James’ office said B&H “intentionally underpaid sales tax on millions of dollars in receipts from its sales of cameras” and other electronics since 2006 using an instant rebate program in which manufacturers reimbursed the retailer for sales — with B&H never paying tax on those reimbursements as it should have.

B&H tried to hide the reimbursements with its accounting methods, but investigators ultimately discovered the retailer had shortchanged the state, James’ office argued. A B&H spokesman at the time denied the claims and said it wouldn’t “be bullied.”

B&H attorneys in January 2020 told the court the attorney general’s office failed to understand how sales tax works when it came to instant savings programs. The group cited expert analysis by Richard Pomp, a tax professor at University of Connecticut School of Law, and state tax department opinions.

The court on Tuesday also rejected arguments that B&H made “reverse false claims” on its tax returns by calculating the instant savings disbursements into its cost-of-goods-sold rather than reporting them as receipts subject to sales tax. Any evidence of fraud needs to be coupled with an actual violation of statute, which didn’t occur, the court found.

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18 COMMENTS

  1. Shame in the court! Letitia James is black and the court must be discriminatory against blacks and that’s how it came to such a conclusion! Just like the BLM movement, it has nothing to do with fact or merit: it’s just a black and white issue.

  2. Hey Letitia, you anti semite. Will you please give us an update on former President Trump’s personal tax returns?! Your magnum opus. When Orthodox Jews in Crown Heights were getting bricks thrown at their heads by black thugs, you said you were too busy protecting the citizens of NYS by vigorously researching, checking, and analyzing President Trump’s personal tax returns from 1978. The same for ladies having their shaitels pulled off their head by blacks. The same for knockout game against Frum Jews.

  3. Little surprise. The state’s case never had any merit. The only question was whether they would draw an honest court, and it appears they did.

    These rebates are not income to the retailer. They are manufacturer rebates to the customer, which the retailer simply passes on. They reduce the price of the product, that is all. That is not income in the customer’s hand, and certainly not in the retailer’s. And BH the court was honest enough to say so.

  4. Please note; my above comment was made with tongue-in-cheek and hopefully doesn’t engender a false understanding of my comment.
    The case had no basis to begin with. The law needed clarification and the whole issue could have been resolved amicably outside of court and the fortune this case cost.

  5. Before people start screaming Antisemitism!, they go after the big famous companies because it creates a high profile case and most importantly if the business loses a company like B&H has the ability to pay.

  6. Do we really live in a democracy?
    A disgruntled employee or competitor can file a baseless whistleblower complaint under seal causing tremendous financial harm and erosion of good will, Attorney General press conferences and press releases. The target must spend significant resources to defend itself and when the charges prove baseless the target, in this case B&H is left with the tab and no recourse for it’s damages.

  7. It’s a shame the mainstream media is literally ignoring this ruling. Back in November 2019 they were all giddy in their reporting.

    And Letitia James owes B & H a huge apology. I’m not holding my breath, as she too is silent on Twitter where she put this out almost two years ago
    “We’ve filed a lawsuit against B&H, the photo & electronics store, for allegedly failing to pay sales tax on tens of millions of dollars they received from manufacturers for “instant rebate” discounts to customers.

    In New York, no company is above the law.”

    The silence is deafening.