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Post date: May 3 2016

A.G. Schneiderman Announces Agreement With Art Sales Executive For Re-Payment Of Taxes On Artwork Acquisitions

Art Sales Executive And Collector Victoria Gelfand Agrees To Pay $210,000 In Sales And Use Tax On More Than 30 Works Of Art

NEW YORK--Attorney General Eric T. Schneiderman today announced an agreement with Art sales executive Victoria Gelfand, whose companies failed to pay New York sales and use tax on more than 30 works of art purchased by her companies. As part of the agreement, Gelfand’s companies will pay $210,000 in sales and use tax combined to the state.

“Art buyers may not avoid sales or use tax simply by claiming that artwork they enjoy at home is intended for resale,” said Attorney General Schneiderman. “That rule is clear, and my office is committed to ensuring the art industry follows it.”

Between 2005 and 2013, Ms. Gelfand employed two companies to engage in the purchase and resale of artwork, and her companies purchased more than 30 works of art in New York using resale certificates, including such works as John Baldessari’s “It Couldn’t Be Helped,” Cecily Brown’s “Almost Always True,” Richard Prince’s “Piney Woods Nurse,” and Cindy Sherman’s “Untitled (#217),” for an aggregate purchase price exceeding $1 million.  The companies paid no sales or use tax on the art purchased, but occasionally displayed some of the art in Ms. Gelfand’s New York residence.  Ms. Gelfand has agreed to pay sales and use tax on the acquisitions displayed, and on future acquisitions displayed in the same manner.

New York law requires sellers of goods, or vendors, to charge sales tax on sales of goods.  Purchases that a vendor makes exclusively for resale are excluded from sales tax, if the vendor purchases retail property with the intent exclusively to resell that property.  If, after purchase, a vendor uses the item initially bought exclusively for resale, then the vendor must pay a compensating use tax at the same aggregate rate as the sales tax.  Use tax applies when, among other circumstances, a vendor diverts for its use inventory purchased with resale certificates that was initially intended exclusively for resale.

Attorney General Schneiderman thanks the New York State Department of Taxation and Finance for its important assistance in concluding this matter to resolution.

This matter was handled by Thomas Teige Carroll, Chief of the Taxpayer Protection Bureau, with assistance from Legal Support Analyst Bianca LaVeglia, as well as from former AAG Lisa White and former LSA Rupinder Garcha.  The Taxpayer Protection Bureau is a unit of the Criminal Division, which is overseen by Executive Deputy Attorney General Kelly Donovan.

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