BrandSource Dealer Takes on Lowe’s … And Wins

By Alan Wolf, YSN

In a modern-day version of David vs. Goliath and a major win for Illinois independents, a BrandSource dealer challenged five big-box chains in court and won his first round last month, against Lowe’s.

The dealer, former Maytag Channel council member and current YSN contributor Rich Lindblom, has since sold his greater Chicago business. But five years prior he approached his state’s Department of Revenue in an effort to even the retail playing field. His beef: Five box chains — Best Buy, hhgregg, Home Depot, Lowe’s and Sears — weren’t collecting sales tax on installed dishwashers and over-the-range microwave ovens, putting his company, Advanced Maytag, and all other Illinois appliance dealers at a competitive disadvantage.

In a practice that started with Sears, the chains were claiming a state tax exclusion for contractors. Clearly, contractors they were not, Lindblom argued, and the revenue department agreed, issuing the retailers a Compliance Alert in 2015. The alert was ignored.

Frustrated by their fraudulent policies, Lindblom and his brother Bud took it upon themselves to file suit on behalf of Illinois.

“When the Compliance Alert was issued, I felt vindicated,” Lindblom recalled. “I thought that this would finally level the playing field for my store and all the other independent Illinois appliance stores as well. But as it turned out I was wrong, so we were left with no choice but to sue them in hopes of righting this wrong.”

The first trial, against Lowe’s, was finally held before a circuit court judge in 2019, by which time Sears was bankrupt and hhgregg was out of business. The trial lasted a week, but before a decision could be rendered the pandemic struck and the case was put on hold.

Then finally, just last month, the judge found in the Lindbloms’ favor, and Lowe’s could now be facing millions of dollars in penalties and unpaid taxes, according to a Bloomberg report. The other two defendants, Best Buy and Home Depot, are slated to face the same judge in separate trials.

“It was a flood of emotions,” Lindblom said, upon hearing the news. “I mean, this had been going on for so long already.  More than anything I felt relieved because it proved that what I had been saying all along was correct. The state would get the tax dollars it was entitled to and Lowe’s would no longer have an unfair advantage over every independent dealer in Illinois.”

“And who knows,” he added. “Maybe this will help BrandSource dealers in other states down the road.”

BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, mattress, furniture and CE dealers.