B&H sued for tax evasion

[DLD]

That's not going to happen!

Every New York Jew moves to Florida sooner or later. There's a long welcoming committee waiting at the MIA.

Side story - back in December, 1998 I was visiting Miami-Dade for the first time. Mom and I stop off at a local deli for lunch. "You, Jimmy, didja get cawfi? Get cawfi. Not gonna get cawfi? Fine, fogeaboutit". Then it dawns on me that the Jets are in town to play the Dolphins. Those were the Jets traveling companions.

 

[Cary Knoop]

Every New York Jew moves to Florida sooner or later. There's a long welcoming committee waiting at the MIA.

Side story - back in December, 1998 I was visiting Miami-Dade for the first time. Mom and I stop off at a local deli for lunch. "You, Jimmy, didja get cawfi? Get cawfi. Not gonna get cawfi? Fine, fogeaboutit". Then it dawns on me that the Jets are in town to play the Dolphins.

The way I understand it is that the B&H family is very much tied to New York, in particular, Williamsburg, Brooklyn.

 

[thekreative]

In Canada our Tax man just asked Home Depot for the records or every person that has a trades account...... all those cash deals are now looking at having to pay back tax from years ago! 2013-2016

 

[DLD]

The way I understand it is that the B&H family is very much tied to New York, in particular, Williamsburg, Brooklyn.

Yes, it's an Orthodox center but, in reality, the company has become so well known for their internet store, they can easily move some of their offices anywhere in the US while keeping their main operations at their present location.

PS. In North-East Miami-Dade, there are - the last I counted - about a dozen temples, including the Orthodox. So, it's not an inhospitable terrain. And it's far more receptive to the commercial activities than NYC.

PPS. But just because Florida is more business friendly than New York doesn't mean that B&H can skip on the tax laws. The rates may be lower but the basic taxation laws are likely to be very similar, especially on the treatment of the discounts vs. the rebates.

 

[scorsesefan]

As a born and bred New Yorker I know BH very well. Yes, they are closely tied to the Orthodox community here, but a notable portion of their workers come from upstate NY, particularly from a Hasidic community named Kiryas Joel. I believe they run buses for their employees to and from these upstate towns to the BH Superstore.

I don't believe they will relocate any of their facilities, because they are deeply invested in employing members of the local Jewish community -- particularly Orthodox and Hasidic Jews with whom they've formed relationships.

 

[Guest]

This doesn’t have anything to do with the PayBoo card.

Got it. I must’ve skimmed it when a BH payboo was adsensed.

So, BH owes the money then?

Edit: nevermind. I guess, i don’t really care.

 

[Run&Gun]

Got it. I must’ve skimmed it when a BH payboo was adsensed.

So, BH owes the money then?

Edit: nevermind. I guess, i don’t really care.

That's the first place my mind went when I saw the thread title, as well.

There are some in the industry that are definitely not fans of B&H or Adorama, because of sales tax, right now. B&H with Payboo and Adorama just not charging sales tax. I've made two purchases from Adorama in the last few months and they billed me zero sales tax even though they are legally required to bill it, collect it and submit it to my state. I've been given a heads up from a sales rep at one of my dealers that charges sales tax to watch out for a letter from my state at the end of the year/beginning of next year, because Adorama will supposedly report the unpaid sales tax to your state. They said it's happened to others. I'm actually going to talk to my accountant about, so that we are in-front of it and not giving them a reason to open up an audit.

 

[Cary Knoop]

I've made two purchases from Adorama in the last few months and they billed me zero sales tax even though they are legally required to bill it, collect it and submit it to my state.

My understanding is that they only need to do that if they go over a certain annual sales threshold. For instance for California it is $500,000, North Carolina is $100,000.

It seems to me that Adorama should not have much trouble in surpassing that though.

 

[Run&Gun]

My understanding is that they only need to do that if they go over a certain annual sales threshold. For instance for California it is $500,000, North Carolina is $100,000.

It seems to me that Adorama should not have much trouble in surpassing that though.

Yeah, they must easily meet(and surpass) that threshold. Just my small purchase alone was almost 5% of that. There have been years that I would have accounted for over 50% of that from a lone dealer.

 

[AndreeOnline]

They are more likely to take the few that are splashy (make headlines)...

Also, they might want to go after the ones that withheld $7'000'000 in tax, as opposed to the ones that owe $23'758 and 5 cents.

 

[Jim Feeley]

B&H has been sued several times; the ones I've heard about have been about labor practices. Remember a couple years ago?

B&H Photo Will Pay $3.2M to Settle Department of Labor Lawsuit
https://hyperallergic.com/396180/bh-photo-settles-department-of-labor-lawsuit/

And a similar case and settlement, IIRC, in 2007/2008. And perhaps others. So anyway, perhaps regulators are keeping an eye on them, or disgruntled employees are acting as whistleblowers.

It's business and presumably the AG and B&H will figure out when to push and when to settle. And it looks like the NY AG regularly files suits over tax issues.

 

[Cary Knoop]

Chances are that B&H will settle and survive.

 

[Jim Martin]

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!

In relation to your MAP statement, before there was MAP pricing, B & H would drop prices on items to cost (or below) so the other regular dealers could not compete....it was random but always seemed to be the current popular cameras/items. So with no tax (until this year) and no MAP pricing, all the regular dealers who actually did the selling, lost sales to them. I often had people come in, get all the info and basically decide which one to get, leave saying they'll be back, then come in a few days later and ask me to set up and show them how to use the camera they just bought from B & H!
I'm glad there is MAP pricing and the tax issue has been resolved....not just for our industry, but for all smaller retail operations that were getting killed by Amazon.....an even playing field.
Also, in regards to their 30% credit card w/no tax, they are banking on you not paying it off within 30 days.
Just me personal thoughts....

Jim Martin

 

[stoneinapond]

^
+1

 

[DLD]

In relation to your MAP statement, before there was MAP pricing, B & H would drop prices on items to cost (or below) so the other regular dealers could not compete....

Jim Martin

Well, you know, Jim, when I was in retail, I hated losing a sale to an Internet/mail order based retailer or a membership store such as Costco or Sam's Club .... but, goshdarnit, they were great for the consumer.

 

[Cary Knoop]

I'm glad there is MAP pricing and the tax issue has been resolved...

I am glad the tax issue is resolved as well, it was unfair for out of state retailers to have an advantage.

But I completely disagree with MAP, to me, this belongs in the category cartels, price-fixing and other such types of "gentlemen's" agreements.

People in favor of MAP effectively do not want any competition in the market, everything is a fixed manufacturer set price.

 

[DLD]

When I was selling the in-demand electronics in LA, the idea was to bring someone in the store and negotiate in person. That's how car dealerships operate. Some may give you a quote over the phone but what they really want is to have a potential customer on the premises but if someone wants to find a good bargain and knows what he is doing, it's not that difficult to come to the store that will negotiate and get a better than the MAP deal. The MAP's have always been around and the outfits that wanted to get around them advertised all sort of odd sounding promotions - "eligible for the special 20% in-store discount" or some other line. In LA, Adray's was famous for it. In Florida, BrandsMart does the same thing and does it very successfully too.

A smaller size retailer can't generate that type of traffic and so they have to hold their margins higher, offer special services, offer the higher end gear, etc. But there will always be discounters around. Adray's management got scared in the early 1990's that the "full service" retailers such as Good Guys and Silo (on top of the existing Circuit City and Best Buy) would drive it out of business, so they dropped their casual warehouse approach and decided to compete with big chains directly. Naturally, it killed them.

 

[Seanik]

When Adam Smith passed away, he was actually in the middle of writing "The Wealth of Nations II: MAPs and the Neuvo-Merchantalist Conundrum." He never finished it, so we're left with no guidance on this.

 

[Run&Gun]

When I was selling the in-demand electronics in LA, the idea was to bring someone in the store and negotiate in person. That's how car dealerships operate. Some may give you a quote over the phone but what they really want is to have a potential customer on the premises but if someone wants to find a good bargain and knows what he is doing, it's not that difficult to come to the store that will negotiate and get a better than the MAP deal. The MAP's have always been around and the outfits that wanted to get around them advertised all sort of odd sounding promotions - "eligible for the special 20% in-store discount" or some other line. In LA, Adray's was famous for it. In Florida, BrandsMart does the same thing and does it very successfully too.

A smaller size retailer can't generate that type of traffic and so they have to hold their margins higher, offer special services, offer the higher end gear, etc. But there will always be discounters around. Adray's management got scared in the early 1990's that the "full service" retailers such as Good Guys and Silo (on top of the existing Circuit City and Best Buy) would drive it out of business, so they dropped their casual warehouse approach and decided to compete with big chains directly. Naturally, it killed them.

My family, who has been in the retail business for 65 years, operated successfully for most of their existence, on much smaller margins(~10%) and lower selling prices than the big stores, because we had much less overhead(and vastly superior customer service, care and knowledge). From my point of view, MAP did nothing for the little guy. As a matter of fact, my Mom had the manager of one of the big box stores call her and yell at her and try to tell her that she couldn't sell for what she was. He was pissed, because they had that stupid "we'll meet/beat any price and refund 10% of the difference" policy. Ended up costing them ~$2,000. I don't think anyone has one of those policies anymore. Probably because the margins have had to be cut so much over the years to stay competitive, so there is no room to absorb losses like that. That tells you the exorbitant mark-up the big stores were operating under, back in the day.

 

[Eric Coughlin]

My family, who has been in the retail business for 65 years, operated successfully for most of their existence, on much smaller margins(~10%) and lower selling prices than the big stores, because we had much less overhead(and vastly superior customer service, care and knowledge). From my point of view, MAP did nothing for the little guy. As a matter of fact, my Mom had the manager of one of the big box stores call her and yell at her and try to tell her that she couldn't sell for what she was. He was pissed, because they had that stupid "we'll meet/beat any price and refund 10% of the difference" policy. Ended up costing them ~$2,000. I don't think anyone has one of those policies anymore. Probably because the margins have had to be cut so much over the years to stay competitive, so there is no room to absorb losses like that. That tells you the exorbitant mark-up the big stores were operating under, back in the day.