From: Richard Kahn Sent: Tuesday, November 29, 2016 7:29 PM To: Jeffrey E. Subject: Art my take after reading two articles below on =hether or not Leon should pay and handle shipping two pieces to PBI and =aris is that we are safer having Leon do rather than Haze =rust please advise thank =ou http://www.herrick.com/jason-kleinman/publications/new-york%E2%=0%99s-sales-and-use-tax-%E2%80%93-lessons- for-art-collectors/ May 2016 New York Sales and Use Tax and Works of Art Sales tax on the purchase of artwork =dds up to a significant amount in the high-end art world. Art dealers =nd collectors should be aware of two recent New York sales tax developments when it =omes to selling or purchasing works of art. Resale certificates The New York State Attorney General =nnounced a $7 million settlement of a sales and use tax claim against a =eal estate developer for misuse of resale certificates that he used in order to =urchase artwork free from sales tax but later displayed the artworks in his residence or business premises. The Attorney General =lso announced a settlement with an employee of an art gallery who had registered a separate business as a vendor and =sed the resale certificate to purchase art she later used. A valid resale certificate enables a =etailer to purchase goods free of sales and use tax based on the fact =hat the retailer will then sell the goods to an ultimate consumer and that sale will be =ubject to tax. A vendor does not have to collect sales tax when the resale certificate is presented within 90 days of the =urchase and is offered in good faith. Acceptance in good faith generally means that the vendor has no knowledge that the =ertificate being offered is false or fraudulently presented. 20 NYCRR5532.4(b)(2)(i). For example, if someone =urchasing beer, wine, or liquor presents a resale certificate in the name of a hardware business, =t would appear on its face that the certificate is being misused since =ne cannot sell th