Beleaguered Ivanka Trump's business faces fresh tax case
23 February 2017
First daughter Invanka Trump's business headaches seem to be multiplying. A licensee of the first daughter's jewellery company owes $5,213.91 in unpaid sales taxes, according to New York state's tax department and a Trump spokesperson.
The company is also battling in the New York court system over a more than $3-million judgment filed last year in a contract dispute. And separately, another firm involving Trump is embroiled in a copyright infringement lawsuit over the design of a fashion sandal.
New York's Department of Taxation and Finance filed a tax warrant on 27 January against Madison Avenue Diamonds LLC, a company created in 2005 that does business as Ivanka Trump Fine Jewelry. The firm's luxury offerings include a Liberté Diamond Collar necklace that costs $15,900 and a Metropolis Lune Large Pave Diamond Dome ring that goes for $9,900.
Trump also has faced unrelated business issues. Nordstrom and some other retail stores have dropped or downplayed her fashion items over slumping sales (See: Trump brand doesn't sell: now Sears, Kmart drop products).
The gem company's liability to New York State stems from unpaid taxes due on jewellery sales from August and November 2015, and February 2016, James Gazzale, a spokesman for the tax agency, said Wednesday.
The warrant is a public record, serving notice that taxes are owed. It lists a slightly smaller amount, which Gazzale could not immediately explain. Under New York law, continued failure to pay could trigger additional interest and penalties. In worst-case scenarios, the state could attempt to collect through a levy or seizure and sale of property.
While saying he was not authorized to discuss any individual case, Gazzale said, "We are in constant communication with business owners to try to resolve debts as soon as possible."
Abigail Klem, president of Ivanka Trump Brands, said Trump has no responsibility for the tax debt. "This situation involves an independent licensee of Ivanka Trump Brands and has absolutely nothing to do with her company," Klem said in a statement.
A New York County Supreme Court judgment entered in 2016 shows that the licensee company and one of its principals separately were ordered to pay $3,059,590 to KGK Jewelry in the contract lawsuit. The case focused on the firm's non-payment of most of the $3 million due for jewellery KGK delivered to the licensee for sale.
Rejecting an appeal, a mid-level state appeals court affirmed the judgment. The licensee has asked that court for permission to appeal that ruling to the state's highest court. In the meantime, KGK is seeking a warrant against the licensee for non-payment.
The fashion sandal lawsuit was initially filed in June against Ivanka Trump, her IT Collection LLC company and several firms that did business with her. At least one of the business partners has since been dropped from the case.
Filed by Aquazzura, an Italian footwear design firm, the civil action accuses Trump and other defendants of improperly copying the Florence-based company's design for the "Wild Thing," a high-heel fashion sandal with distinctive suede tassels.
In 2010, Trump and her business partners "resorted to knocking off" Aquazzura's popular sandal with a similar version dubbed the "Hettie," the Italian company charged in an amended court complaint.
A representative for one of Trump's partners characterized the case in June as "a baseless lawsuit aimed at generating publicity". Federal court files show the case remains pending.
Ivanka Trump's legal issues are dwarfed by cases involving her father, President Trump. A 2016 USA Today analysis of court filings across the US found that then-GOP presidential candidate and his businesses had been involved in at least 3,500 federal and state legal proceedings over three decades.
The nation's commander-in-chief came to his daughter's defence early this month, weighing in via Twitter to claim she had been "treated so unfairly" by Nordstrom's decision to stop carrying her fashion line.