NEW YORK (1010 WINS) -- Manhattan photo and electronic superstore B&H knowingly failed to pay sales tax due on tens of millions of dollars it received from electronics manufacturers to reimburse the company for 'instant rebate' manufacturer discounts the retailer passed along to its customers, alleges a lawsuit filed Thursday by New York state attorney general Letitia James.
"B&H proudly claims that it puts principles over profits, but for 13 years, the company actually chose profits over principles by defrauding New York taxpayers out of millions of dollars owed to the state," James said in a statement.
She continued, "B&H deliberately chose not to pay the sales tax it knew was due to New York State in order to gain a competitive edge over companies that chose to follow the rules. No company is above the law, which is why my office filed this lawsuit, and will do so against any company that tries to skirt its responsibilities by illegally trying to tilt the playing field"
But B&H, located at 9th Avenue and 34th Street said the lawsuit is unfounded.
“The Attorney General is flat wrong – and is trying to create a tax on discounts in order to make New Yorkers pay more," spokesman Jeff Gerstel said in a statement. "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."
Gerstel continued, "B&H has done nothing wrong and it is outrageous that the AG has decided to attack a New York company that employs thousands of New Yorkers while leaving the national online and retail behemoths unchallenged. The Attorney General wantsto charge New Yorkers a tax on money they never spent. It’s wrong and we won’t be bullied."