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The prosecution is the latest in a series of similar cases targeting the art world and focused on incidents of where the company sold pieces to residents of New York and failed to charge sales tax. The company created documents that falsely claimed goods had been shipped out of New York state when they had not. In other cases, Shrubsole dispatched pieces out of state to avoid paying sales tax, knowing that they would be sent back to New York.

The authorities are now collecting the tax from those concerned. The Manhattan District Attorney’s office has confirmed that it is conducting an ongoing investigation into other dealers, arts businesses and customers relating to tax evasion.

In the meantime, LAPADA have issued advice to British dealers to help them avoid becoming unwittingly entangled in such cases
as the result of dishonest practices by their customers.

In their most recent newsletter, the association advise: “If sales are being made without sales/useage tax to an out-of-state buyer it is additionally recommended that your terms make it clear that all local taxes will be payable by the buyer and that the buyer should make delivery arrangements. This will avoid the difficulties that can occur if a buyer tells you the goods are going out-of-state, but they ultimately do not go.”

• The issue of inter-state sales tax was on the agenda when the 35 states involved in the Streamlined Sales Tax Project met on November last year in Chicago to vote on legislation to unify sales tax codes in participating states and propose technologies to collect online sales tax revenue.

The essence of the project, that has obvious implications for antiques dealers and eBay users who do business across state lines, is simplification of state sales tax systems, and the use of technology, to make it easier for online companies and other remote sellers to collect sales tax.

The member states estimate they lost $7bn in sales tax revenue from Internet purchases alone in 2001.