News broke last week that auction house Christie’s had agreed to pay a $16.7 million fine to the Manhattan District Attorney for failing to collect sales tax between 2013 and 2017. This was surprising in many ways, but a reminder of the lurking dangers of sales and use tax in multi-state and international art transactions. While the variables can seem daunting, the decision-tree of how to account for sales and use tax need not be overly complicated. The Christie’s settlement is an opportunity to review the rules of the road.
Recent news of “Freeports” opening in Delaware prompts a review of what these facilities are for, what they are not for, and where collectors and dealers can get themselves into trouble. When used carefully there are meaningful tax efficiency opportunities, but no one should think that they are or can be a one-stop way to avoid sales tax in particular. Thoughtful planning is the key.
Topics: New Hampshire, Fritz Dietl, David Arendt, Delaware, Geneva, Oregon, Luxembourg, Pure of Love of Art Versus Mere Investment, Customs, Crozier Fine Arts, yco International Ltd., Sales & Use Taxes, Dennis Kozlowski, Delaware Freeport, Freeports, Alaska, Tax, Montana