A relatively recent amendment to New York State’s 2017-2018 budget narrowed the State Tax Law § 1118(2)’s nonresident exemption to its use tax. The use of property in New York by nonresident investment entities is no longer exempt from use tax, prompting taxpayers to restructure the manner in which art portfolios are brought into, and displayed in, New York.
For a while now, New York State has been particularly aggressive in its art industry investigation for alleged violations of the State’s sales and use tax laws. New York tax authorities have been scrutinizing the art world to ensure that sales and use taxes are being paid. There has been a wave of investigations into financial dealings in the robust art market. Soaring prices, secrecy in the art world and loose regulations in this field have permitted art collectors to dodge significant sales and use taxes.READ MORE…