NEW YORK (1010 WINS) -- The New York state attorney general’s office has hit Sotheby’s with a lawsuit claiming the auction house bilked taxpayers out of millions of dollars by helping its clients evade sales taxes.
Sotheby’s helped create “false tax exemption certificates,” also known as resale certificates, for an art collector and his company, despite the fact that they were not eligible for the exemption, the lawsuit filed by New York Attorney General Letitia James on Friday charges.
The auction house “violated the law and fleeced New York taxpayers out of millions just to boost its own sales,” James said in a statement.
“Millionaires and billionaires cannot be allowed to evade taxes while every day Americans pay their fare share,” she said. “This lawsuit should send a clear message that no matter how well-connected or wealthy you are, no one is above the law.”
Porsal Equities, the collector’s company, admitted that it “improperly used resale certificates” as part of a 2018 settlement with the attorney general’s office, James said in a release.
James’ lawsuit claims Sotheby’s “knew that the collector and his company were not purchasing art for resale as art dealers in the normal course of business, but accepted their resale certificates anyway, and, in fact, facilitated the creation and use of these resale certificates.”
In a statement provided to 1010 WINS, Sotheby's said it "vigorously refutes the unfounded allegations made by the Attorney General, which are unsupported by both fact and law."
"This is an issue between the taxpayer and the state dating from between five and ten years ago, which, as the Attorney General noted in her complaint, was settled two years ago," the auction house added.