Delaware is fast becoming a depository for the collections of valuable artwork due to the friendly tax structure in the state. The attraction is the lack of a sales tax which can be a burden when hundreds of thousands of dollar might have to be paid on transaction in almost all other states. But Delaware allows the art to be stored in the state which means any transaction will take place sales tax free even if the art is simply sitting in a warehouse otherwise untouched. As a result, special storage facilities are popping up all over the state which offer proper and safe storage for vulnerable art while granting the protection of Delaware law. This new found industry is expected to grow as the super rich make art a commodity rather than a display piece in a home, business, or museum.
See Graham Bowley, Art Collectors Find Safe Harbor in Delaware’s Tax Laws, New York Times, October 25, 2015.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
