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Gagosian Gallery Owes New York State $4.3 Million in Back Taxes

According to Randy Kennedy of the New York Times, Gagosian Gallery owes about $4.3 million in back taxes, penalties, and interest to New York State. The attorney general’s office said Pre-War Art Inc., Gagosian’s California affiliate, shipped and sold around $40 million in art from 2005 to 2015 to Gagosian’s customers in New York, but did not pay taxes on those sales. Larry Gagosian is Pre-War’s president and president of all the parties in charge of his gallery’s operations.

Gagosian will start a shipping company of its own as part of an agreement with the office of the attorney general to be legally compliant. Pre-War will also be reporting all information to New York State about its sales over the next six years.

The New York State attorney general, Eric T. Schneiderman, said “Those who evade art taxes potentially deprive the state of millions of dollars, and ordinary New Yorkers are stuck footing the bill.”

“This has huge implications for doing business in a way that everyone thought was acceptable,” stated Joshua Rubenstein, a lawyer in New York who works with a number of art collectors, about the case.