Published: April 14, 2020
NEW YORK CITY – Manhattan District Attorney Cy Vance Jr has announced the resolution of an investigation into violations of the New York Tax Law and New York Penal Law by the New York auction house Chrisite’s Inc (Christie’s New York) and affiliated overseas Christie’s entities, including Christie’s Manson & Woods Limited (Christie’s London) and Christie’s Private Sales, Limited (Christie’s Private Sales) for failing to register to collect and to collect New York and local sales tax between 2013 to 2017.
In the Deferred Prosecution Agreement, Christie’s London, Christie’s Private Sales and other affiliated Christie’s entities admitted to failing to register to collect and to collect New York and local sales tax between 2013 to 2017 on purchases made in and/or delivered to New York despite having a legal obligation to do so.
In addition, Christie’s Private Sales also admitted that once certain employees finally determined in 2015 that the entity had an outstanding obligation to register to collect and to collect New York sales tax with the New York State Department of Taxation & Finance (“NYS Tax”), it failed to register the entity to collect tax with NYS Tax because of the perceived audit risk. Subsequently, Christie’s Private Sales began collecting sales tax from its customers without registering, and Christie’s New York, who were long registered to collect sales tax in New York, falsely reported and remitted this sales tax to NYS Tax as its own.
As part of the Deferred Prosecution Agreement, Christie’s London, Christie’s Private Sales and other affiliated Christie’s entities will pay up to $16.7 million in sales tax, penalties and interest over a two-year period, relating to sales made in and delivered to New York for which it failed to collect the required New York state and local sales tax between 2013 to 2017. The agreement takes into consideration the Christie’s entities prior and continued cooperation with the investigation, and numerous remedial measures instituted by the entities to come into compliance with their sales tax obligations. Christie’s will pay up to $16.7 million in sales tax, penalties and interest to the District Attorney’s Office, which will forward in full to New York state.
Update 4/15: A Christie’s spokesperson reached out with the comment, “For the past several years Christie’s has worked in cooperation with the Manhattan District Attorney’s Office to resolve specific issues created as a result of incorrect tax advice Christie’s received regarding the application of sales tax obligations for specific non-US affiliates. The company has since reviewed its advice and internal processes to ensure compliance with relevant tax law. This settlement agreement brings the matter to full resolution.”
The company says its leadership has voluntarily worked with the Manhattan District Attorney’s Office over several years to fully investigate and resolve the matter. As a result, financial provisions for the initial settlement payment were accrued in previous years.
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