A newly filed lawsuit by the State of New York accuses electronics retailer B&H Foto & Electronics Corp of alleged tax fraud. The lawsuit, which was recently published on the New York Attorney General's website, claims that B&H 'intentionally underpaid sales tax on millions of dollars in receipts from its sales of cameras and other consumer electronics.

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The lawsuit claims that B&H failed to pay approximately $7 million in sales taxes on reimbursements it received from manufacturers on products sold with instant rebates to consumers. Specifically, the lawsuit alleges that when a customer would purchase an item with an instant rebate through B&H, and the manufacturer of the camera gear would subsequently reimburse B&H for the difference, B&H didn't pay taxes on that reimbursement money, which would be considered income. This 'arrangement,' the lawsuit alleges, took place for 13 years and was brought to the state's attention by a whistleblower.

The lawsuit likewise claims:

B&H knew that it should have been paying the tax. B&H has repeatedly and explicitly acknowledged—internally, to outside vendors, and to a competitor—that under New York tax law, it owed sales tax on these reimbursements . . . And, even after B&H learned that the State was investigating it for failing to pay the sales taxes due on these reimbursements, B&H continued to underreport its sales taxes while simultaneously admitting to others that it knew the sales tax was, indeed, due.

The lawsuit goes into great detailed about alleged communications within B&H that reportedly prove the company knew that it was supposed to pay taxes on instant rebate reimbursements. In a statement to The Verge, however, B&H said that it 'has done nothing wrong,' and that the New York AG has 'decided to attack' a local company while 'leaving the national online and retail behemoths unchallenged. '

New York is seeking repayment of the back taxes, interest, penalties, and damages related to the alleged tax fraud.

We have contacted B&H with a request to comment on the lawsuit and allegations; we will update this article accordingly if we receive a response.

2019-11-16 22:40