Oregon: We want your art, no questions asked

A New York Times report explains how and why the Big Art pipeline runs through Oregon

Francis Bacon, "Three Studies of Lucian Freud," 1969/courtesy Portland Art Museum

Francis Bacon, “Three Studies of Lucian Freud,” 1969/courtesy Portland Art Museum

“Oregon—the Cayman Islands for ridiculously expensive art.”

Graham Bowley and Patricia Cohen of The New York Times published a story Saturday that explained why Oregon museums, specifically the Portland Art Museum and the Jordan Schnitzer Museum of Art in Eugene, were able to exhibit recently purchased artworks for a short spell before they disappeared into their owners’ vaults. The idea of Francis Bacon’s “Three Studies of Lucian Freud” triptych making its way from the auction halls of New York to the walls of the Portland Art Museum late last year must have seemed passing strange to them, and they did a deeper report about such transfers. And yes, it was about tax avoidance.

When I linked to the story on Facebook, a commenter, quoted above, nailed it exactly.

Oregon is one of five states—New Hampshire, Alaska, Montana and Delaware, are the others—that act as a tax shelter for such collectors as Elaine Wynn—and as Jill Hartz of the Schnitzer museum said, if you are a California collector, Oregon is right on the way home. What tax are they avoiding? A “use” tax. The Times linked to the statute: Good luck making sense of it. What it means in this case is that a California collector who buys a $142 million painting like the Bacon triptych at Christie’s has to pay a use/sales tax to California when she ships it home. Unless she shows it in one of the Rogue Five states first.

The Times goes into the matter of what Oregon museums get out of the deal and what some of the problems can be. On the one hand, they get expensive paintings they wouldn’t otherwise be able to show. On the other, sometimes those paintings don’t make much sense to their internal exhibition logic and they have the moral problem of profiting from the tax dodging schemes of very wealthy people. Apparently, the moral problem hasn’t been especially significant because the Times reported that a LOT of paintings come through these parts under the same circumstances as the Bacon paintings did.

The transaction (moral and otherwise) may be more complex than deciding whether the chance to show big works of art in a relatively collector-poor state (let’s face it: Oregon doesn’t have a lot of one-tenth of one percenters who squirrel away great paintings) outweighs the cost to California citizens in uncollected taxes. It’s possible that the relationships our museums are building with out-of-state one-tenth-of-one-percenters may lead to art crumbs from their table making their way to us in the form of loans or even bequeaths. Relationships with major Art Barons (and Baronesses) can be precious.

And why not take advantage of Oregon’s decision to go without a sales tax when you can? But this begs the question. The question isn’t whether the maneuver is legal or not. It is, at least until California, et al., close the loophole. Or whether and to what degree our museums benefit from the dodge. That’s actually a long and complicated debate that goes to the heart of how our museums should function, whom they should benefit, what role they should play in the culture (when SHOULD we have that debate?). It’s whether or not we want to be the Cayman Islands for “ridiculously expensive art.” And its ridiculously wealthy owners.

Hey, aren’t we just a poor, out-of-the-way state trying to extract just a little taste of art world glam from the banquet table that’s high above our heads and out of our reach? What could possibly be wrong with that?


Pro Publica made a tax avoidance graphic out of the situation!


Read more by Barry Johnson.

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