Queens beauty supplies are raking $200,000 in tax credits from the city’s cosmetics supply chain, and the Queens-based beauty supply company, Pet Supply, is one of them.
According to the Queens Department of Finance and Consumer Protection (DPF), Pet Supply was awarded $40,000 worth of tax credits in 2015-16.
Pet Supply’s annual report also noted that Pet Supply received $50,000 of additional tax credits through the city in 2017-18.
Pet’s founder, Paul Smith, was also awarded $60,000 to help Pet Supply with operations in 2018-19.
Pet supplies’ tax credits for the first three years were a total of $3,500, and Pet Supply had a total tax credit of $4,200 for 2017-19, the DPF said.
But the company had no idea that it was eligible for the tax credits until it was targeted by the DPP’s 2017 tax return, which listed a $40k tax credit awarded to Pet Supply in 2017.
“We have received tax credits on a lot of items in the past,” Smith told the Queens Star-Ledger.
“And so it’s not that we weren’t looking for it, it’s just that we never thought we were going to get a rebate.”
The DPP said that it received a “representative sample” of Pet Supply products from the company last December and was not able to review the company’s product history because Pet Supply “did not submit its annual report as required by the City of New York.”
“The DPP determined that Pet was a taxable organization, so it was required to submit a report to the City for tax credits,” DPP spokesperson Melissa Boulton told the Star-Leda.
The DFP said that Pet supply had to submit its 2016 tax returns in order to claim the tax credit, but Pet Supply did not submit any tax returns until the DPs 2016 tax return.
Pet supply did not immediately respond to an email from the Star Ledger requesting comment.
Smith told reporters that the DPO did not know that Pet supplies was a tax-exempt organization until it received Pet Supply tax credits.
“It’s one of the biggest surprise things we’ve ever seen,” Smith said.
“The company was completely unaware that it wasn’t taxable and they were on the right track.”
The tax credits are not the only thing Pet Supply has received in the last year.
Pet Supplies was awarded an additional $10,000 tax credit in 2019-20, which was “partially offset by tax credits” that Pet supplied in 2017, the company said in its tax return in 2018.
“This tax credit was not used in conjunction with the other tax credits awarded,” the DPU stated.
“Tax credits are allocated by the Department of Licensing and Taxation.”
However, according to the DPD, the tax breaks are “part of the general tax credit program for the Department.”
“Tax credit amounts do not include any other tax incentives provided through the City,” the department added.
“In addition, the City has a number of other incentives that can be used to assist Pet Supply to achieve a profitable business model.”
Smith and his business partner, Adam Boulter, who also works for Pet Supply but is not a director, said they were shocked when they learned about the tax break.
“My biggest fear was that we were out of tax,” Smith explained.
“I was hoping we could do this with no problems, but it was a bit of a shock.
We just thought it was going to be one more thing we could get rid of.”
Pet Supply says it was only a small part of the company, but its owners were “horrified” at the news.
“Our team is still in shock,” Boulted said.
Smith and Boulters said they believe that their tax credits have “no effect” on their business, and they plan to keep fighting for the additional tax credit.
“There’s no way we can give up this business,” Smith added.
In a statement to the Star Leda, Pet Supply said that the tax rebate was not available to them until the tax year ended on January 31, 2019.
“All tax credits were awarded to the company as part of a competitive bidding process, which allowed Pet Supply the opportunity to submit their 2016 tax report,” the statement said.
Pet was able to secure $40K tax credit Pet supplies tax return from 2017 to 2019.
The company’s tax credits total $3k in 2018, $2k in 2019, $1k in 2020, and $1.5k in 2021.
Pet supplied products to the city for 10 years, according the company.
“While Pet Supply does not claim any direct or indirect tax benefits, the city has provided the company with numerous tax credits to offset the costs of its operations,” the company wrote. Pet