Maine Antique Digest May 2015

Maine Antique Digest, May 2015 11-A

Conservation and the Appropri-

ations Subcommittee on General

Government.

Oklahoma

Oklahoma HB 1787 would

“prohibit the importation, sale,

purchase, barter, or intention to

sell ivory or rhinoceros horn.”

“Ivory” means any “tooth or

tusk composed of ivory from

any animal, including, but not

limited to, an elephant, hippo-

potamus, mammoth, narwhal,

walrus, or whale, or any piece

thereof, whether raw ivory or

worked ivory, or made into, or

part of, an ivory product.”

There is an exemption for

antiques. The Department of

Wildlife Conservation may is-

sue a permit authorizing the

import, sale, offer for sale, or

purchase “when the ivory, ivory

product, rhinoceros horn or rhi-

noceros horn product is part of

a bona fide antique and is less

than twenty percent (20%) by

volume of the antique and the

antique status of the antique is

established by the owner or sell-

er with historical documentation

evidencing and showing the an-

tique to be not less than one hun-

dred (100) years old.” Musical

instruments and firearms would

not be affected by the law “when

the ivory…is part of a musical

instrument, including but not

limited to string and wind instru-

ments and pianos, or a part of a

firearm, and the owner or seller

provides historical documenta-

tion as the Department may re-

quire, demonstrating and show-

ing the item was manufactured

no later than the year 1975.”

The bill is now with the Wild-

life Committee.

Iowa

Iowa Senate Bill 30 would

prohibit “the sale of ivory and

rhinoceros horns with certain

permitted exceptions.” Ivory is

defined as “any item containing

worked or raw ivory from any

species of elephant or mam-

moth.”

There is an exemption for

antiques. The Department of

Natural Resources may issue a

permit for the sale, offering for

sale, purchase, trade, barter, or

distribution of an ivory article or

rhinoceros horn “If the ivory ar-

ticle or rhinoceros horn is part of

an antique and is less than twen-

ty percent by volume of such

antique and the antique status is

established by the owner or sell-

er with historical documentation

and showing the antique to be

at least one hundred years old.”

The Department of Natural Re-

sources may also issue a permit

allowing the sale of musical in-

struments as long as the “owner

or seller provides historical doc-

umentation demonstrating the

item was manufactured no later

than 1975.”

The bill is with a subcommit-

tee of the Natural Resources and

Environment Committee.

by Ethan McSweeney, Arizona Sonora

News Service

group of Scottsdale, Arizona, art gallery

owners say they are being crippled by

a sales tax that kicked in at the beginning

of this year. The new regulation adds the

transaction privilege tax (TPT), Arizona’s

sales tax, to fine art sales to out-of-state

buyers who purchase the art in Arizona

and have the seller ship it out of state. This

raises the sales tax on these out-of-state

sales from the 1.65% Scottsdale city sales

tax to 7.95%.

Scottsdale art gallery owners say they

are already losing business now that word

has gotten out in the art connoisseur com-

munity, and they fear it could drive buyers

to Western art hub rivals, such as Santa Fe,

New Mexico, and Jackson, Wyoming. “It

really puts us in an uncompetitive position

now that this is taxed,” said Brad Richard-

son, owner of Legacy Gallery in Scottsdale

(and two other locations out of state) and a

dealer at Scottsdale Art Auction. He added

that more than half of his customers come

from out of state.

Richardson and other gallery owners are

pinning their hopes on SB 1120, sponsored

by Republican Senator Debbie Lesko of

Peoria, Arizona, which would exempt those

kinds of sales from the tax.

Not everyone is buying into the plight

of the multimillion-dollar Scottsdale art

galleries. “I just can’t help thinking you’re

overreacting to this,” Senator Steve Farley,

D-Tucson, told Richardson during a senate

hearing. Farley, who is an artist himself,

pointed out that people purchasing these

pieces of art (and who would likely be able

to afford the extra tax) could get around

paying it if they really wanted.

As with many tax-related matters, the

details get messy. The issue stems from

sales tax reform legislation passed through

the legislature and signed into law in 2013.

Among the provisions of that TPT reform

was ending the sales tax exemption for

works of fine art purchased in Arizona and

shipped out of state, which had been in ef-

fect for more than 30 years. That 2013 leg-

islation was crafted by Lesko.

“At the time, people thought, ‘Why are

we doing that?’” Lesko said. “So, we put

a provision in the bill to eliminate that [ex-

emption], and nobody talked about it until

January 1, 2015, came around and my bill

went into effect.”

For Bob Pejman, owner of Pejman Gal-

lery in Scottsdale, that came on February 10

when he received a letter from the Arizo-

na Department of Revenue informing him

of the new sales tax. “The entire month of

January we didn’t know that we should be

collecting this tax,” he said. Pejman then

had to pay out of pocket the sales tax dollars

not collected for the month. The prices for

pieces of art in these galleries range from

hundreds to hundreds of thousands of dol-

lars. At Scottsdale Art Auction, some pieces

go for more than $1 million.

Now Lesko is seeking to rectify her tax

increase on the art galleries. She said the art

gallery owners contacted her, but at first she

was reluctant to pursue the exemption. “Af-

ter much analysis with my staff members

and talking with different gallery owners, I

felt that it indeed was a worthy thing to ex-

empt these businesses, especially the auc-

tions that do bring in tourists from all over

the nation,” Lesko said.

On February 16, Lesko filed the legisla-

tion as a “strike everything” amendment to

a bill. The exemption would apply retroac-

tively to the beginning of the year. SB 1120

cleared the senate on a 19-9 vote and re-

ceived approval from one house committee.

Supporters of the legislation are working

against more than one deadline. The Scotts-

dale Art Auction begins April 11, and other

auctions that occur during the spring also

bring in a great deal of business. The bill

also needs approval from one more com-

mittee before it can be heard by the whole

house, and the cutoff for committee hear-

ings is fast approaching.

A main issue guiding Lesko’s reasoning

behind pushing the legislation is that no

other state has this tax—something gallery

owners are quick to point out. Ken Stro-

beck, executive director of the Arizona

League of Cities and Towns, however, said

it’s simply not true that no other state taxes

this activity. When someone buys a piece

of art in any state, that person would have

to pay the use tax in the state the art gets

shipped to, if the state has that tax. For ex-

ample, if someone were to purchase art in

New Mexico and have it shipped to Colora-

do, that person would pay Colorado use tax.

“Any of those people who are out of state

and buying art and come from a sales tax

state are legally obligated to pay use tax on

their purchase when they get back home,”

Strobeck said. The problem is that not ev-

eryone follows that to the letter of the law.

“About ninety-nine percent of them never

[pay] that,” he said. Arizona’s TPT on these

sales isn’t as loose. The League of Cities

and Towns is against the exemption, be-

cause it would compromise the uniform tax

base it is trying to achieve, Strobeck said.

As Farley noted, art consumers can get

around the sales tax through federal inter-

state commerce law by placing a hold on

the piece in Scottsdale and leaving to buy

it from out of state. “They already have the

break if they really want it,” Farley said.

“So, why should we give them a special

exemption just to make it slightly more

convenient for their customers who can al-

ready afford to buy a $100,000 sculpture or

painting?”

The art gallery owners insist this isn’t the

way they want to do business. Richardson

said that when people are in the room, it

drives up the prices for art being sold at the

auctions, and having people come to Scotts-

dale and other cities in Arizona helps drive

tourism and spending. “We want an active

room,” Richardson said. “We want people

to be here and see the art, and they will have

a tendency to spend more.”

John Marzolf, owner of the Biltmore Art

Gallery in Scottsdale, said having people

buy from elsewhere would make it more

difficult to actually make the sale. “If they

say, ‘I want to go home and think about it,’

or ‘I’m going to come back and look at it,’

you’re lucky if you get twenty percent that

come back,” Marzolf said. “You want to be

able to sell it while they’re there.”

During a senate finance committee hear-

ing on the bill, Senator Lynne Pancrazi,

D-Yuma, raised concerns that this could

open the door for other groups to come out

to the legislature and ask for their out-of-

state sales to be tax-exempt, and, “There

goes the TPT reform right out the door.”

Farley also said the excess of sales tax

exemptions cost the state billions in po-

tential revenue. “I think it’s time to look at

all these exemptions very carefully as they

come forward, and I think we should look

at the ones already in place as well,” Farley

said.

Legislation introduced this session would

also see sales tax exemptions for crop dust-

ers, billboard rentals, and aircraft equip-

ment. The only out-of-state sales currently

exempt under the TPT reform law crafted

two years ago are sales of motor vehicles,

which is meant for car auctions.

Richardson is threatening to take his

business out of the state if the sales tax ex-

emption doesn’t get passed. He said he’s

already explored Las Vegas as an option for

moving his Scottsdale gallery. “If collect-

ible cars get an exemption, then we think

fine art should too,” he said.

New Sales Tax Affecting Galleries in Arizona

ore than 400 vintage collectible signs

from the Vernon Walker collection

were offered for sale by Mecum Auctions

on March 28 and 29 in West Memphis,

Arkansas. The collection, mostly dealer-

size porcelain neon signs, brought a

hammer total of about $4.65 million.

The top lot at $143,750 (includes buyer’s

premium) was an 11½' tall Weakley Equip-

ment Co. animated intricate porcelain neon

sign from 1948 in original and working

condition. The legs appear to walk, mow-

er blades spin, and grass clippings fly. Bill

Piper of Neogram Sign Company designed

the sign in 1948 for the company’s founder,

J. E. Weakley. In 1948, it cost $8000.

According to the catalog, the Weakley

sign “marked the beginning of Walker’s

collection.” When Walker had found out

that the sign was for sale, he jumped at the

opportunity. The Weakley Equipment Co.

was in downtown Memphis, Tennessee. The

catalog quoted Walker: “I’ve been around

here since I was able to walk. I hated to see

something like that go to scrap.... I didn’t

realize it was as big as it was. I thought it

was about 8 feet. We got the crane up there

and found out it’s 11½ feet tall. And the guy

on the sign stands 7 feet tall.” Official mea-

surements are 96" x 138" x 36".

A Chevrolet / W.F. Chase original dou-

ble-sided porcelain neon sign in working

condition brought $74,750. An 8' Ford sign

also sold for $74,750. A 6' Siesta Motel sign

reached $63,250. A rare New Idea Farm

Equipment sign sold for $43,700 to a buy-

er who, according to Mecum Auctions, was

quoted as saying, “I hadn’t seen one in seven-

ty years, and I couldn’t wait another seventy

to find another one, so I just had to have it.”

For more information, check the website

(www.mecum.com

) or call (262)

275-5050.

Neon Sign Brings $143,750

Sold for $143,750. Photo courtesy Mecum

Auctions.

A1920s-era Goodyear Tires / C.O.D. Garage Co. sign with vintage

milk-glass lettering sold for $115,000. The pre-neon backlit

double-sided tin sign is known to be fragile and is difficult to find

in good condition. Photo courtesy MecumAuctions.

original

porcelain

neon

factory-rotating

Mobil Pegasus in

working condition

brought $83,375.

Photo

courtesy

MecumAuctions.