States are cracking down on art collectors who aren’t paying taxes owed on their purchases.
States don’t release details about investigations into evasion of taxes on art purchases. But according to lawyers representing defendants in such cases, state attorneys general and revenue departments around the country have stepped up their investigations and prosecutions for failure to pay sales and use taxes on art purchases.
Thomas C. Danziger, a New York City art lawyer, says investigators in New York and other states monitor art sales through data mining that includes examinations of declared items coming through U.S. Customs, regular audits of major art galleries, reviewing news about art buying in the media, searches of interstate shipping logs and sharing of information with other states. The state attorney general’s office wouldn’t confirm this information.