Real estate mogul Aby Rosen reaches $7m tax settlement

Dispute centred on differing regimes for collecting and dealing in works of art

The New York Attorney General, Eric Schneiderman, announced yesterday (3 May) a $7m settlement with the New York-based real estate developer and art collector Aby Rosen “for failing to pay millions in sales and use taxes”. Schneiderman alleges that, between 2002 and 2015, Rosen bought or commissioned more than 200 works of art (through two companies) for at least $80m—but failed to properly pay the applicable tax.

Schneiderman says that Rosen signed resale certificates to accompany his purchases, indicating that the works—by artists including Jean-Michel Basquiat and Andy Warhol—were exempt from sales tax because they were intended for resale (an exclusion that is available to art dealers). But according to Schneiderman, Rosen “used the artwork for personal enjoyment and the enhancement of his real estate business brand”.

Rosen—whose latest projects include a contemporary-art overhaul of the august Philip Johnson-designed restaurant at the Four Seasons in New York—has agreed to pay $7m and promised to adhere to a code of conduct that will govern his future art purchases and commissions, according to a press release issued by the attorney general’s office. (The settlement does not include an admission of guilt.) “When art collectors don’t pay their fair share, law abiding New Yorkers should not be stuck footing the bill,” Schneiderman says in a statement.

A spokesman for Rosen says: “Mr Rosen is a well-known art dealer and has always comported himself as an art dealer through his company, 22nd Century Acquisitions, and Lever House Artwork. Mr Rosen is also a private collector of fine art. The recent settlement with the AG's office relates to an uncertainty as to whether some of Mr Rosen's transactions were done as a private collector or as a dealer based on how artwork can be displayed for sale. Mr Rosen will continue to act as both an art dealer, buying and selling fine art, and as a private collector, as applicable.”