Sales and Use Taxes: How They Apply to Collectors and Dealers


US sales and use tax rules vary from state to state. 

Depending on the state in which you reside, use tax may be imposed at the same rate as the sales tax that would have been due had the purchase been made from a vendor within the state. As a result, owners, dealers and collectors of fine art should be aware of the potential consequences of their purchases. In some cases, use tax may be due even if the vendor does not collect sales tax at the time of purchase. As such, it is important to consult with a qualified professional to ensure compliance with all applicable laws.

As with any large purchase, it is important to be aware of the potential sales tax consequences before completing a transaction. Currently 45 states and the District of Columbia impose some sort of sales or use tax with differing exemptions and procedures, with each state and at times cities having unique laws, factors such as origin, status of seller, initial delivery locations, storage and final destination of the artwork all play into the planning and compliance process.

Many states also impose a use tax on certain items that are purchased outside of the state and brought into the state for use. As a result, if a purchaser bought an item in another state and then brought it into their home state, they would be subject to use tax on the purchase. Similarly, if a collector purchases an item from another state and then brings it into their home state, they may also be subject to it. As such, it is important for buyers to be aware of the potential use tax liability before making a purchase. Owners, dealers and collectors are advised to consider potential sales taxation consequences as it relates to their purchases.

Mary Pat Kohberger, Director of Tax at Deloitte, will present on how sales/uses apply and offer insightful perspective around potential issues and tax-saving opportunities so you can become aware of sales taxation concerns and help avoid unwanted additional expense or surprise.

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Mary Pat Kohberger

Mary Pat has over twenty years of experience specializing in multistate sales and use taxes. She received a bachelor’s degree in accountancy from the University of Illinois at Chicago. She is a CPA and a member of the Illinois CPA Society, the AICPA and the Institute of Professionals in Taxation (IPT). She is a frequent instructor and speaker on sales tax matters. Mary Pat is a director in...

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