A.G. Underwood Announces $250,000 Settlement With Famed Savile Row Tailor H. Huntsman & Sons For Failure To Collect And Remit New York Sales Tax
New York, NY - July 6, 2018 - Attorney General Barbara D. Underwood announced today a $250,000 settlement in connection with an investigation into the sales tax collection practices of bespoke tailor H. Huntsman & Sons, located in London’s storied Savile Row and more recently in Manhattan. The New York Attorney General alleges that from at least January 2007 to November 2017, Huntsman sold and delivered approximately $1.6 million worth of garments and other goods to customers in New York without collecting or remitting New York State and local sales tax.
“Out-of-state tailors who come to New York to make sales must play by the state’s rules,” said Attorney General Underwood. “Huntsman did the right thing by cooperating with our investigation and coming into compliance with the law. Our office expects all out-of-state vendors who are responsible for collecting and remitting sales tax to do the same.”
From at least January 2007 to November 2017, employees of Huntsman engaged in substantial economic activity to promote and facilitate the sale of Huntsman’s clothing in New York. Huntsman’s employees traveled to New York for “Trunk Shows,” during which they met with prospective customers at New York hotels or other locations to take measurements and arrange orders of bespoke and made-to-measure clothing. The Attorney General found that, based on these activities, Huntsman had substantial nexus with New York that obliged it to collect and remit New York sales tax when it shipped and delivered custom-made garments to customers in New York – but failed to do so.
Additionally, in 2015, H. Huntsman & Sons incorporated an affiliate in New York called Huntsman Savile Row Limited, and established a permanent presence in Manhattan. From at least January 2016 to November 2017, Huntsman sold and delivered garments to customers from its New York City location for which it should have – but did not – collected and remitted New York State and local sales tax.
Huntsman cooperated fully with the Attorney General’s investigation and has admitted that it was required to collect and remit New York State and local sales tax on the receipts of all taxable sales, but failed to do so.
In addition to paying $250,000 in taxes, interest, and penalties for the ten-year period, Huntsman has agreed to register for a certificate of authority with the New York State Department of Taxation and Finance and comply with all provisions of the New York State Tax Law. Furthermore, Huntsman has agreed to separately state the tax on customer invoices where New York state and local sales tax is due and to reform its invoicing and record-keeping practices to allow auditors to determine the taxable status of each sale.
Attorney General Underwood thanks the New York State Department of Taxation and Finance for its important assistance in this investigation.
The Attorney General’s investigation was led by Assistant Attorney General David Farber, with assistance from former Legal Support Analyst Lauren Bilow. The Taxpayer Protection Bureau, overseen by Bureau Chief Thomas Teige Carroll and Deputy Chief Scott Spiegelman, enforces the New York False Claims Act, including tax claims made thereunder. It is a unit of the Economic Justice Division, which is headed by Executive Deputy Attorney General Manisha Sheth.