Christie’s has been ordered to pay up to $16.7 million for not paying New York sales tax on private purchases made or ultimately delivered in the state between 2013 and 2017. The settlement, which requires $10 million be paid up front and the remainder to be paid in two years, is the result of a years-long investigation by the office of Manhattan’s district attorney.
According to public documents obtained by the New York Times
, the tax violations began in 2013 after Christie’s opened Christie’s Private Sales, a separate company meant to centralize private purchases across the firm’s international locations. A senior tax adviser told Christie’s executives that the new London-based company would not have to collect state and local taxes in New York, a policy that surprised both customers and sales staff, many of whom asked why their purchases were not subject to taxation.
The tax lapses were not limited to New York locations. Between July 2013 and January 2017, Christie’s overseas sales offices delivered $189 million worth of goods to New York buyers. These purchases should have been subject to local and state taxes, but none of the offices had registered for sales taxes. In addition to the fine, the settlement requires Christie’s to conduct an internal investigation and tax re-education initiative, as well as the possible termination of certain employees involved with the program.
The settlement comes as Christie’s, along with other major auction houses like Sotheby’s and Phillips, postpone
sales and furlough
staff in response to the COVID-19 pandemic.