Sotheby’s Pays $6 Million to Settle New York Sales Tax Evasion Probe

Sotheby’s Inc. agreed to pay $6.25 million to settle a New York state lawsuit that accused it of advising wealthy clients they could avoid sales taxes by falsely claiming they were buying art for resale purposes.

New York Attorney General Letitia James announced the deal in a statement Thursday. She said Sotheby’s employees from 2010 to 2020 encouraged clients to make the false claims even though they knew the purchases were actually for private collections or intended as gifts.

“Sotheby’s intentionally broke the law to help its clients dodge millions of dollars in taxes, and now they are going to pay for it,” James said. “Every person and company in New York knows they are required to pay taxes, and when people break the rules, we all lose out.”

James sued Sotheby’s in 2020, accusing the auction house of helping a shipping executive use a false resale certificate to dodge taxes. The state later expanded the case by including allegations involving seven additional collectors and numerous Sotheby’s employees from across the organization, including its tax department.

In a statement, Sotheby’s said that it admitted no wrongdoing in connection with the settlement and was committed to full compliance with the law.

“These allegations relate to activity from many years ago – in some cases over a decade – and Sotheby’s provided much of the evidence which the AG used to obtain a settlement with the taxpayer referenced in the complaint six years ago,” the auction house said in its statement.

Read More: Sotheby’s Helped More Rich Clients Dodge Sales Tax, NY AG Says

© 2024 Bloomberg L.P.