Can Art Be Purchased for Resale?

The basic rule is simple: art purchases qualify for reseller exemptions only when they are exclusively intended for resale, not for display or personal use.

Misusing an exemption certificate can be costly. If the state determines that a certificate was used improperly, you may owe the original tax amount — and potentially double the liability plus a steep 14.5% interest rate if the action is deemed deliberate fraud.

To qualify as a bona fide reseller or investor, you must maintain supporting evidence, such as:

• Records of frequent art sales
• A separate place of business
• Advertising or promoting your gallery

Proper documentation is essential to demonstrate that a tax-free purchase was not an abuse of tax law.

For any questions about art reselling or related matters, please contact Wayne Britton at (857) 216-7807.