New York Senate proposes new tax on auction sale of art

8 March 2021 | Applicable law: US

On Tuesday March 2, Senator Robert Jackson (D) proposed a bill, S.5317, in the New York Senate to amend the tax law by “imposing a special tax on artwork, antique furniture, and antique jewelry sold at auction; and to amend the state finance law, in relation to establishing the art education fund.” If passed, the bill would add a new article to the tax chapter, imposing a special tax of the greater of 0.3 percent or $1 on the receipts from the sale of art, antique furniture, or antique jewelry sold at auction. The tax would be imposed on the purchaser and collected by the auctioneer in addition to state and local sales tax.

The text of the bill does not clarify whether this special tax would apply to all sales that occur in New York State, or whether, like the existing sales tax, the special tax would be destination-based, so that it is only imposed when a purchaser takes delivery in New York State.

If passed, the proceeds collected by this special tax are to be deposited in a newly-established art education fund, “for the purpose of providing assistance for art education and art supplies at the kindergarten through twelfth grade levels at public schools.” The bill would become effective on the January 1 following enactment.

This is the latest bill proposed for the purpose of raising revenue for the New York school system, following on the heels of a May 2020 bill proposed by Shelly B. Mayer (D) to extend the top state income tax rate for those that make $5,000,000 or more, in order to provide funds in general support of public schools and operating support for SUNY and CUNY.

The Withers Art Law team is continuing to track these proposals. The full text of S.5317 can be found here

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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