New-York tribune., 1919-05-07
War Tax Questions and Answers

Question 1.-The law states that paintings sold
by the artist shall be tax exempt Are pictrrS
owned by the artist and sold by museums exhi-
pltions and dealers for the artists account IN hs
considered sold by the artist? If not shall
we not have unequal taxation on the same thing
IN different places, and is this not prohibited nv
the Constitution? -
Answer 1-Section 902 provides THAT thers
shall be levied, assessed collected and maid ,,non
paintings :. sold by any person
other than the artist. a tax equivalent to 10 per
centum of the price for which so sold This Sec
ton shall not apply to the sale of any such
article to an educational institution or public art
museum A sale made by the artist direct ar
through dealer. club, association, museum auc-
tioneer, commission merchant or other agent ia
not subject to the tax.
Question 2-That part of the luxury fax i,c]ud
ing jewelry has been officially interpreted "a
applying only to the ultimate sale for consump-
tion and use thereby exempting sales between
dealers Does this ruling hold good as be-
tween dealers in paintings? If not is there a
limit to the number OF times the same painting
may be taxed
Answer 2-The tax attaches to the sale of =
painting by any person other than the artist and
as often as such painting is sold Therefore, sales
between dealers between dealer and customer
are subject to the tax.
Question 3-If as often occurs, a dealer buys a
painting directly from the artist is it subject TO
tax when rcsold? If SO, either the dealer must
deouct the amount of the tax when he buys from
the artist in order to be able to sell at the artists
regular price. thereby in effect throwing the tax
upon the artist against the intent of the law or
the practice of direct purchase must be given
up and the artist cut off from his source of most
ready revenue.
Answer "a painting bought by dealer from
an artist is not subject to the tax but when such
painting IS resold by the dealer the tax attaches
Question If dealer makes a sale for pri-
vate individual on a commission basis and a tax
is paid on the selling price, is the individual also
subject to tax on the amount such sale would
net him? E. g., if we sell painting for Mr. A.
for $1,000. plus tax, ST. 100 and remit to him
$1,000 less commission of Is per cent or $3.50
does Mr.. A pay tax of $85 on the $3.50 which
he nets
Answer "A painting sold by dealer for
private individual a commission basis is sub
ect to the tax the selling price and no further
tax attaches to the net proceeds remitted to the
owner.
Question 5-Suppose we sell picture valued
at $10O0. taking in part payment another pict-
ure valued at $500. is there a tax on the full
$1,000 valuation, and is there also tax on the
$500 picture taken in exchange? Is there an adj
ditional tax the $500 picture when it is resold
Answer 5-The tax attaches to the full selling
price of picture irrespective of whether another
picture is taken IN part payment. The picture
taken in part payment, when resold is subject to
the tax.
Question 6-f negotiate sale for private
individual who is paid direct by the purchaser
we are allowed commission by the seller Is
this commission subject to tax?
Answer 6-The commission received by an agent
for negotiating sale for a private individual
who is paid direct by the purchaser is not subject
to the tax The tax, however, attaches on the
full selling price.
Question Are pictures by deceased artists,
owned and sold by the family of the artist, exempt
from tax?
Answer Pictures by deceased artists, sold
by an executor administrator of the estate of
the artist, exempt from tax but paintings
owned by members of the artists family who ara
not acting executors or administrators are
subject to tax.