New York (AFP) – The auction house Sotheby’s will pay $6.25 million to settle charges that it helped art buyers avoid paying taxes. The office of New York state attorney general Letitia James said Sotheby’s, whose headquarters is in New York, helped collectors dodge taxes of tens of millions of dollars in art from 2010 to 2020. It said the auction house encouraged buyers to state fraudulently that they were acquiring works for resale later. Such acquisitions can be tax-exempt whereas works bought for private use are in fact subject to tax.
Sotheby’s defended itself, saying these transactions happened “many years ago,” and the auction house actually provided evidence that James used to obtain the settlement now being announced. “Sotheby’s admitted no wrongdoing in connection with today’s settlement,” it said in a statement seen by AFP.
James, who brought the case in 2020, said the tax-dodging clients included one identified as the “Collector,” who bought $27 million of artwork from Sotheby’s between 2010 and 2015 using tax exemption forms known as resale certificates. These papers certify that a buyer is exempt from paying sales tax because the purchase is only for resale, not for private enjoyment. Sotheby’s accepted resale certificates from this person even though it knew the works were for private use, and in some cases, Sotheby’s staff even helped this collector display the works in their home, James said in a statement.
“Sotheby’s intentionally broke the law to help its clients dodge millions of dollars in taxes, and now they are going to pay for it,” James said.
© 2024 AFP
