Sotheby's Settles $6.25M Tax Evasion Case

Sotheby's has agreed to pay $6.25 million to settle a lawsuit brought by New York State Attorney General Letitia James, accusing the auction house of helping clients avoid millions in sales taxes. The lawsuit claims Sotheby's enabled at least eight clients to falsely use 'resale certificates' to acquire art as tax-exempt purchases meant for resale, while the art was actually for private collections. One notable client, referred to as 'the Collector,' purchased $27 million worth of art, including works by Jean-Michel Basquiat and Anish Kapoor, using this scheme. Sotheby's settlement includes no admission of wrongdoing but promises reforms to prevent future tax law violations. The case highlights the auction house's alleged decade-long practice from 2010 to 2020, which was revealed with significant evidence provided by Sotheby's itself. The lawsuit and settlement serve to enforce compliance with tax laws, ensuring companies pay their fair share.