The Missouri Department of Revenue ("Department") recently determined that artwork sold by artists as a fundraiser for a non-profit organization would be subject to sales tax. The organization, which existed to promote the arts, planned to sponsor an event in which artists would display their work. The paintings, along with up to two other pieces by each artist, would be for sale at the event. The artists would give the organization a 25% commission on all sales, for use in funding art activities in the community. The organization contacted the Department to find out if sales of the artwork would be taxable.
Missouri taxes sales of tangible personal property unless an exemption applies. Artwork is tangible personal property. The sales of artwork in this case would be taxable retail sales because the artists will transfer the artwork to purchasers for use or consumption and not for resale. In addition, the artists will keep most of the price received. Ultimately, the intent of the event would be for the artists to sell artwork, rather than for the organization to sell goods to raise funds. As a result, the art sales would be taxable.