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New York sues Sotheby’s for helping important customers avoid sales tax on artwork



FILE PHOTO: A sign marking Sotheby’s headquarters is seen on the Upper East Side of New York City, USA, June 18, 2019. REUTERS / Shannon Stapleton

NEW YORK (Reuters) – Sotheby’s was sued by the New York attorney general on Friday, who accused the auction house of defrauding the state by helping a key client avoid millions of dollars in sales tax on the artwork. technique that he bought.

Attorney General Letitia James said Sotheby̵

7;s helped a client, a contemporary art collector, obtain a fake duty-free certificate known as a resale certificate by letting him describe himself as a home. art dealer rather than a collector.

James said this allows a customer, who runs a shipping business and lives primarily abroad, to avoid sales tax on more than $ 27 million (£ 21 million) of works he purchases to For personal use from 2010 to 2015, including apartments in Manhattan.

The complaint says Sotheby’s has accepted four resale certificates despite “overwhelming” evidence that the sale is for personal use, including when senior Sotheby’s employees visit. apartment “to admire his artwork on the wall.”

In a statement, Sotheby’s said it “vigorously denied the Attorney General’s allegations, which are not supported by both the facts and the law.”

The lawsuit was filed in a New York state court in Manhattan, and it claims damages plus civil penalties for violations of the state False Claims Act.

It was filed two years after one of the client’s companies, Porsal Equities, reached a settlement of $ 10.75 million to settle related state allegations about the use of a resale certificate. .

“Millionaires and billionaires are not allowed to evade taxes,” James said in a statement. “Sotheby’s broke the law and escaped millions of New York taxpayers.”

The New York-based Jonathan Stempel report; Edited by Bill Berkrot and Rosalba O’Brien


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