B&H sued for tax evasion

The Attorney General doesn't state why it is lawful to charge sales tax on money never spent. On the other hand, a manufacturer's rebate to a consumer never includes sales tax. But since the retailer is "fronting" the rebate to the consumer, the retailer pockets the manufacturer's rebate. If the rebate had been property instead of money, for example you buy a lens and receive a rebate for a tripod, you don't pay tax on the tripod, and the sales tax collected was for the pre-rebate sale price which would have included the value of the tripod. Looking at it that way, the city is getting defrauded out of sales tax because of the rebate.
 
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That $7mil is just a percentage of the percentage of those that used the payboo option. Shows the kind of volume they deal with.

They’ll be ok.
 
Tom Roper said:
The Attorney General doesn't state why it is lawful to charge sales tax on money never spent.
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I was thinking the same thing until I started to read some of the comments and then think about how rebates used to work and I see the argument/train of thought, now.

Today, most rebates are “instant”, 20 years ago you would pay full price including the sales tax on that and then you would send in paperwork, receipt, etc. and they would mail you a check or pre-paid card for the rebate amount. So they’re arguing it’s still the same thing(the middle step has just been removed), that the customer should have paid the sales tax on the original amount.

Remember, this is a rebate, not a discount. There is actual money moving around, so the government wants their piece.
 
Let's just call it "too big to fail" and be done with it. B&H has been distributing a little bit of tax relief to thousands of hard working folks who are actually investing in their industry, creating work opportunities through delivery of goods (content) and services... unlike, say, the banking, securities, real estate industries, etc. there in NY who get tons of tax dodges for creating what... higher prices on everything? (Slight over simplification, lol, but the ROI on the opportunity cost for those uncollected taxes is not even close in comparison... yet, here they are in a petty shakedown without acknowledging real the economic benefits).

I'm not biased at all, of course... no, not me.
 
Run&Gun said:
I was thinking the same thing until I started to read some of the comments and then think about how rebates used to work and I see the argument/train of thought, now.

Today, most rebates are “instant”, 20 years ago you would pay full price including the sales tax on that and then you would send in paperwork, receipt, etc. and they would mail you a check or pre-paid card for the rebate amount. So they’re arguing it’s still the same thing(the middle step has just been removed), that the customer should have paid the sales tax on the original amount.

Remember, this is a rebate, not a discount. There is actual money moving around, so the government wants their piece.
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Yes, I was thinking that and updated my post.
 
Rebate = a return of part of the original payment for some service or merchandise. You got to tax on the original payment.

So this case seems pretty clear to me.

I think the main problem is the 'you got to offer a minimum advertised price or else' distributor practice!

In a free market, manufacturers/distributors should not interfere with how retailers price their products!
 
I'm thinking of that Ray Stevens song: If 10% is good enough for Jesus, it ought to be enough for Uncle Sam.

According to B&H, they're following the industry practice (which may or may not technically be legal). If this is indeed an industry practice, it would be inequitable for the Attorney General to only prosecute B&H, as that would be showing partiality in administering justice. I know it takes time to build a case, but you'd think the Attorney General would go after at least a couple businesses that are doing this.
 
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Imamacuser said:
you'd think the Attorney General would go after at least a couple businesses that are doing this.
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Well, they need knowledge of the business doing it in the first place, or some reasonable basis on which to investigate. In this case someone blew the whistle on B&H (disgruntled employee, most likely). This may very well lead to more, but I doubt the NYAG is sitting on a pile of these cases and choosing to only go after B&H. More likely this was the first one that came to them.
 
Imamacuser said:
I'm thinking of that Ray Stevens song: If 10% is good enough for Jesus, it ought to be enough for Uncle Sam.

According to B&H, they're following the industry practice (which may or may not technically be legal). If this is indeed an industry practice, it would be inequitable for the Attorney General to only prosecute B&H, as that would be showing partiality in administering justice. I know it takes time to build a case, but you'd think the Attorney General would go after at least a couple businesses that are doing this.
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Well... "Industry Practice" in the Mafia is to kill people, but it's still illegal and they will prosecute you for it. ; )

Apparently they have copies of an email where it was brought to the attention of the "higher ups" at B&H that what they were doing was wrong/illegal and they chose to ignore/keep operating in this fashion. Now I do not know if B&H basically squealing and saying, "But everyone does it" is enough for the AG to start looking into/audit others in the industry that operate in NY or if they have to have compelling evidence up-front to begin to look into said businesses.

You could make the same argument about "partiality in administering justice" every time a police officer pulls just one person over for speeding when the car next to them was doing the same thing, but it's not going to go anywhere in court.
 
dcoughla said:
In this case someone blew the whistle on B&H (disgruntled employee, most likely).
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You might be right, but this is more likely the result of an audit.


dcoughla said:
...I doubt the NYAG is sitting on a pile of these cases and choosing to only go after B&H. More likely this was the first one that came to them.
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You might be right, but then again, they don't have the resources to go after everyone, and they don't like to lose. They are more likely to take the few that are splashy (make headlines), and the ones that they can lock down for a win.

The NY AG is an elected (not appointed) official.
 
Seanik said:
Sorry, I meant that to mean it was the cause of this:

They are more likely to take the few that are splashy (make headlines), and the ones that they can lock down for a win.
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So you are suggesting that they are trying to pick on B&H?

If they got a credible report on B&H doing this they are obliged to investigate. That does not imply that then they would have to go on a fishing expedition to, for instance, Adorama or any other film and photography equipment retailer.
 
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