Art and tax exemption
Art buyers in New York are facing tighter controls on taxes for art purchases deemed to be for “personal use”. Art dealers do not pay tax on items they plan to sell on, but some have been treating works as their “possessions”. New York attorney general, Eric T. Schneiderman recently settled a $7m case against real estate developer and art collector Aby J. Rosen, who had not paid tax on artworks since 2002. “We are committed to rooting out tax abuses wherever we find them, especially in the art world, where the difference can be hundreds of thousands — if not millions — of dollars in lost tax revenue”, Mr Schneiderman told the New York Times.

Aby J. Rosen, the Manhattan real estate developer and art collector, is well known for exhibiting works from his collection at the landmark Seagram Building and at Lever House, both on Park Avenue, as well as at 530 Park Avenue, a 19-story residential condominium. He also has five pieces by Picasso in his Manhattan home, and a controversial, 33-foot-tall bronze sculpture of a pregnant woman with an exposed fetus on the grounds of his estate in Old Westbury, on Long Island.

That $2.5 million, 13-ton sculpture by Damien Hirst is one of 200 artworks that have put Mr. Rosen at the center of another controversy — this one involving unpaid taxes.

The New York attorney general, Eric T. Schneiderman, announced a $7 million settlement with Mr. Rosen on Tuesday for failing to pay taxes on $80 million in artwork that he had bought or commissioned since 2002.

Art dealers who buy works solely for resale do not have to pay sales taxes. But the attorney general said art buyers like Mr. Rosen could not avoid sales or use taxes by claiming that the artwork they purchased was for sale, while treating the pieces as they would their personal possessions.