That Time Donald Trump Colluded To Evade Sales Tax On $65,000 Worth Of Jewelry

That Time Donald Trump Colluded To Evade Sales Tax On $65,000 Worth Of Jewelry

Billionaire trump is too cheap to pay sales taxes

Much ado has been made about Donald Trump’s stubborn refusal to release his tax returns. But to really understand his aversion to paying taxes, we may very well have to go way, way back. All the way back to 1986. At least that’s what Ryan Ellis, writing for Forbes, thinks.

It seems that back in the day, Trump colluded in a tax evasion scheme with the New York-based Bulgari Jewelry Store. This high-end store included a fashionably well-heeled clientele.

The scam worked like this:

The Donald would stroll into the store with whichever woman he was with at the minute and buy her an expensive necklace or wristwatch. Under normal circumstances purchases such as this are accompanied by New York city and state sales taxes, which would typically be very high on luxury jewelry.

RELATED: Eric Trump Foundation Spent Hundreds of Thousands at Family-Owned Golf Courses

However, Trump would illegally attempt to avoid the tax by “asking” the store to ship the jewelry out-of-state, where the New York sales tax couldn’t be collected. And the store would happily oblige by sending an empty jewelry box to the location. Trump and his female companions would walk out the door with the jewelry that same day.

But state and city tax collectors eventually got wind of this scam, and in order to save his own skin, Trump testified against those he had colluded with at the jewelry store.

This is far from the only time he’s tried to avoid paying taxes. When Trump bought Mar-a-Lago, his famed Florida estate, he got it for a relative steal at $7.5 million. He bragged about this in his book The Art of The Deal. But for years, he simply would not pay local property taxes on the property’s actual value, which was $11.5 million when he bought it.

As Ellis notes, Trump wanted to have it both ways; first buying the property for a steep discount, then trying to pay property taxes at the under-valued level.

What do you suppose would happen if you tried to do that with your city’s property tax assessor?

And it’s not even the only time in 1986 that Trump sank to this level

He also purchased “The Princess,” one of the world’s most expensive luxury yachts from the Sultan of Brunei. To make the deal, he used a lease-back arrangement that involved an out-of-state company so that he wouldn’t have to pay $1.75 million in sales taxes to the state of New Jersey in order to purchase the yacht.

Then came the time that Trump struck a deal with New York City to build the Grand Hyatt Hotel. As part of the deal Trump’s partnership team was to return a portion of the hotel’s profits to the city. But in 1989, an audit showed that his partnership team “understated its net profit” by over $5 million, depriving the city of nearly $3 million in proceeds that went unreported.

City auditor Karen Burstein reviewed the Grand Hyatt’s financial books, and said Trump gave the go-ahead decision to use different accounting rules to determine how much money the city was owed.

“He cheated the city of a substantial amount of money,” Burstein said. “This wasn’t just a good business deal. This wasn’t just business thinking. This was manipulation … It was an example of extraordinary flim-flammery.”

Related: We Estimated How Much Taxes Trump Has Dodged Over 40 Years And It’s Mind-Blowing

Vox’s Ezra Klein noted last year that The New York Times ran a bombshell story in which the paper concluded Trump may have avoided paying taxes for nearly two decades. But even so, the reporters admitted they really don’t know what’s in his tax returns.

The Times reports:

“Donald J. Trump declared a $916 million loss on his 1995 income tax returns, a tax deduction so substantial it could have allowed him to legally avoid paying any federal income taxes for up to 18 years.”

But a lot was riding on this story. As silly as this sounds, Klein notes the newspaper put a lot of weight on the word “could.” The paper’s headline even read “Donald Trump Tax Records Show He Could Have Avoided Taxes For Nearly Two Decades, The Times Found.”

In a rather ballsy move, the newspaper hedged its bets. There was, after all, the possibility that Trump would release his taxes. There was even the chance, Klein notes, that he has been paying his taxes. The paper had a mere three pages of Trump’s records from 1995.

“Everything else is informed speculation, extrapolation, and the word ‘could,’ which appears again and again throughout the article,” Klein writes.

“Think about how dangerous that was for the paper. Trump could have released his tax returns and proven them wrong. Trump could have shown their speculation to be mere speculation, and used it as a cudgel to discredit their reporting on his campaign. The Times,” Klein writes, “was far, far out on a limb.”

Now here’s the kicker:

“But the Times bet correctly. Trump still isn’t releasing his returns. And here’s what that means: Whatever is in his returns is worse than what the New York Times is telling the world is in his returns. The Trump campaign has decided it prefers the picture The Times is painting — a picture where Trump didn’t pay taxes for 18 years — to the picture Trump’s real records would paint.

“What is in those records?”

Given all of this, does anyone really think Donald Trump will ever voluntarily release his taxes?

Photo by Scott Olson/Getty Images

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Megan was born and raised in Ventura, California. She has since lived in the San Francisco Bay Area, the Pacific Northwest, Arizona, Texas, Louisiana, Mississippi, Florida, Mexico, and Costa Rica. While she has always been a liberal, her travels have informed her politics. She has worked for more than 25 years as a professional journalist writing about crime, the police, local politics, feature stories, environmental issues and a variety of other topics. She now writes for Reverb Press.

Megan supports Black Lives Matter and fights against racism, sexism, the corporatocracy, climate change deniers and others who continue to destroy the planet.