B&H Photo and Electronics cheated New York out of at least $7 million in sales tax over the course of 13 years, according to a lawsuit filed Thursday by the state’s attorney general.
The Jewish-owned retailer is “accused of failing to pay tax on reimbursements it received from manufacturers as part of ‘instant rebate’ discounts the company passed along to customers,” the New York Post reported.
The lawsuit filed at the Manhattan Supreme Court accused B&H of choosing “profits over principles when it decided not to pay the tax in order to avoid incurring ‘hundreds of man-hours’ of customer service that it thought would be necessary to explain the tax to its customers.”
“While B&H could have complied with New York sales tax law at any time, by paying out of its own pocket the New York state and local sales tax owed on the amount of a manufacturer’s instant rebate, B&H refused to cut into its profits to do what the law required,” Attorney General Letitia James wrote in the suit.
Her office is seeking tens of millions of dollars in damages, interest and penalties.
A B&H spokesman blasted the suit as “flat wrong” and claimed James was “trying to create a tax on discounts in order to make New Yorkers pay more.”
“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,” the spokesman said in a statement.
B&H Photo & Electronics is owned by Herman Schreiber, a Hasidic Jew of the Satmar sect, and employs hundreds of Orthodox Jews in the company. B&H is closed on Saturdays for Shabbat observance.
This is not the first time the electronics store giant has found itself in hot water.
A US Labor Department lawsuit filed in 2016 accused B&H, the largest non-chain photo and video equipment store in New York City, of heavily discriminating against Hispanic employees by forcing them to use separate, unsanitary bathrooms.
In 2007, B&H agreed to pay $4.3 million to settle a case levied by Hispanic employees over uneven pay scale. In 2009, four female employees sued B&H over failure to promote women to sales positions. In 2011, Hispanic employees Luis Santana and Carlos Marchand sued B&H over denied promotions and raises.