ALBANY, N.Y. — An off-shore art purchaser has agreed to a $10.75 million settlement to resolve charges by the New York State Attorney's Office that it engaged in tax fraud relating to the purchase of millions of dollars in artwork bought from New York art establishments.
According to the New York Attorney General's Office, British Virgin Island-based Porsal Equities Ltd. will settle charges that it falsely used tax exemptions to keep from paying sales tax on artwork it actually used for displays and "personal use." The company also did not pay tax on artwork it purchased and then shipped into New York, the Attorney General's Office said. Porsal Equities failed to correct its tax evasion even after it was notified by the Attorney General's Office that it did not meet requirements for "resale exemption."
“Wealthy art collectors are not above the law,” New York Attorney General Barbara Underwood said in a statement. “Just like any other consumers buying items for personal use, art collectors must pay sales and use tax when making a purchase. They cannot skirt the rules and make law-abiding New York taxpayers foot the bill.”
According to the settlement agreement, Porsal Equities will pay the $10.75 million in taxes, penalties and damages for violating the state's False Claims Act. The settlement also includes the company reporting and filing tax returns for artwork used in the state that was not charged sales tax for displays and personal property artwork, Underwood's office said.