The Portland Art Gallery on Middle Street in Portland is a recently established gallery and an out growth from the website Art Collector Maine. Art Collector Maine charges artists a fee for publishing their work on the website but does not charge a commission on the sale. The Portland Art Gallery does not charge an exhibition fee but it takes the standard Art Gallery commission of 50% on the sales of the work. There is a loud protest arising from the Maine art world aimed at demeaning The Portland Art Gallery, portraying it as a gallery that does not curate the art and is only interested in sales although sales is something that everyone in the art world is very interested in achieving. Selling one's work legitimizes it as well as enabling an artist to spend more time working on their art work.
The Portland Art Gallery is the most recent evolution of the Maine publishing empire which delivers several glossy art magazines, Maine Home + Design, Old Port Magazine and the Maine magazine. These publications have long been praised by the art world as they present a slick image of Maine filled with pictures of art and expensive art homes and its associated life style. The publishing empire has been a main stay for art world advertising for Maine's most preeminent galleries. Once the successful dealers and artists of Maine welcomed Thomas's website, Art Collector Maine, but now their tune has changed, suggesting that The Portland Art Gallery will be prominently visible to summer visitors but may not present the best of Maine art, that it will not nurture that artists career and cares only about sales. I haven't seen the Portland Art Gallery but the pictures look typical of a space that is attractively presented with perhaps too many pictures on the wall. I can't testify to the quality of the the art but I am taken aback at the hostile outcry from the art world and the intensity of the will to demean the gallery and belittle artists who show there. I participated in a discussion on the Maine Artists Facebook page and blogs. There exists an overwhelming view shared by the majority of the posters to which I played the devil's advocate, not only because I believe in the validity of the opposing view but because I believe that there should be more than one view aired in any debate.
One typical interaction goes like this:
Erin Duquette Mackenzie, on all these threads.... You are coming after people and posts that arent even harsh and i think you are over criticizing….well…..theres TOO MUCH here from you than can't be tackled without having a 10 hour university forum… which i would find boring and a silly waste of time….i get the impression you like hearing yourself more than anything rather than really having a valuable back and forth about different opinions that could educate others.
“What I see here is an opportunity. After all, we have Chellie Pingree right here supporting the local art community; and unless someone hands her a problem and a suggestion how to fix it, we can hardly expect her to do anything this problem.Senator Pat Leahy has tried to pass fixes to the tax code to help artists donate to museums. He's even gotten that legislation through the Senate and Obama has made it clear he would sign it. But they couldn't get it through the House. Moreover, from what I am hearing, the issue isn't that you Maine artists are trying to donate directly to museums. Instead, what is far more common - and therefore far more important in terms of seeking relief - is the question of donating to auctions. (Seriously, I would guess it's about 100-1 in terms of how many works you guys donate for sale rather than as items to be entered into a collection.)
The presentation given by Mr Kant fails to take into account the upcoming changing of the guards in the US Congress. Mr Kany is talking about a bill that passed the Senate controlled by Democrats and which could not get passed the House controlled by Republicans. In about two weeks that will change as Republicans take control of the Senate and increase their numbers in the House. Even if the House did pass such a bill, it is unlikely that they would do so without any changes and then the bill would once more have to meet the approval of the Senate- now controlled by Republicans. His argument that the bill is almost passed makes no sense unless one believes that Obama can pass it with a stroke of his pen, bypassing all of Congress.
While some members of Congress have bristled against Leahy's "Artist-Museum Partnership Act" because artists could potentially take advantage of the tax benefits of claiming Fair Value (FV) for items on which they will not have paid income tax. But the vast majority of people who want relief are artists and the non-profits who can sell their work at fundraising auctions. (If artists could get tax benefits, more would donate to the Bakery's Photo-a-Go-Go, for example.) So what we can do is create a white paper that explains the broader problem for thousands of Maine artists and proposes a solution. The policy solution would work because it is quite simple (and modeled by car donations, for example: it's different if you donate a vehicle for a non-profit's use as opposed for it to sell at auction--where it's the auction price that you can deduct):”
The Policy“Artists should be able to write off the sale price at a non-profit's fundraising auction of a work they created up the fair market value (FV) of that work. That would benefit hundreds or even thousands of Maine artists (as opposed to a bill geared towards the donation of art by major living artists to museums - which would benefit a much smaller group of Maine artists). And because it's based on a financial transaction that is open and on the record, it can't be gamed.Moreover, if we design legislation with a clear illustration of the benefits, it should be easy to understand. For example, we could call it the "50/50 Artist Auction Raised Revenue Deduction Act."
And the example could be: "Jeff wants to donate a painting he made to a charity auction of a local 501(c)3 non-profit organization. Currently, Jeff could not deduct anything for making such a donation, since as a professional artist he already deducts his materials as a professional expense. This is because his art is common income property which would count as taxable common income only when he sells itMoreover, if Dan buys Jeff's painting for $1,000, Dan can only deduct the portion of the price he paid that is over FV. So, if Jeff's painting has a FV of $1,500, Dan can deduct nothing as a donation. If Dan pays $2,000, however, he could deduct $500. There is a simple fix in this policy to encourage additional donations and supporting purchases: If Jeff is allowed to deduct what Dan pays up to FV, then more artists will donate their works for auction, there would be more revenues for non-profits, there would be increased activity by the buyers who want to support artists and there would be a distinct financial benefit to artists whose work brings actual revenues at charity auctions.
Moreover, if the law is clear that a 50/50 split with the artist does not have to be reported as income by the artists (for example, if Dan pays $1,000 at auction for Jeff's painting of which Jeff gets $500) then this would not only represent a tax benefit, but a simplification of the tax code as well. The 50% donation will be considered sufficient to cover Jeff's taxable income--which is essentially a more practical and productive repositioning of the logic behind the current ordinary income property model that denies financial benefit to the artist based on the idea that he has not paid income tax on the donated item.
This 50/50 Act would increase revenues both to professional artists and to the non-profits they support. Artists, after all, are among the most numerous entrepreneurs in Maine, for example; so this is a practical and wide-reaching tax relief for American entrepreneurs.
To clarify: If the artist receives half or less of the revenues for the sale of his work at an applicable non-profit charity auction, then he does not have to report that portion as ordinary income. Any revenues above 50% or over FV would have to be reported as ordinary income.
Commentary So , if I am understanding this right, the artist donates as a 50-50 split with the non-profit of the full market value which corresponds to the 50-50 split that a private gallery would take.- but since the 50% donated to the gallery is calculated as a donation- it cancels out the artists ordinary income so that the artist doesn't have to report it- as he would if he sold the painting for an equitable split through a private gallery. If the artist donates the painting to a non-profit the artist gets half the take but does not have to report the income- if he sells it through a private enterprise the artist gets half the take and is required to report the income and so making a "donation" to a non-profit action is a more profitable deal for the artist than selling his work through a free enterprise gallery. If the artist made a 100% donation- he can write off the full value- ie the US taxpayer pays for the painting in the form of a tax deduction but the problem is that if the painting sells for less than full retail value, it lowers the full retail value of the artist's work
This policy model – here nicknamed the "50/50 Artist Auction Raised Revenue Deduction Act”-- is a clear and practical policy fix that would offer financial relief and entrepreneurial encouragement to hundreds of thousands of artist entrepreneurs across the country."
So, who’s in?
There were many!
And once again the conversation ends with an suggested that sounds far too close to the censorship of free speech and open debate:
I asked if the FV was calculated on retail or wholesale vale but did not receive a direct answer and instead was provided a link to the tax code, which is very long but I paid particular attention to the sections on selling art before drawing my own conclusion that it is based on the retail market value.
The Union Of Maine Artists is a sponsor of this lobbying effort. The benefits of joining this non-profit organization include:
- Receive UMVA Membership Discounts on art supplies and framing (and in the near future more discounts planned to arts-related businesses)
- Opportunities to submit to exhibitions -- both online and brick and mortar
- Be able to design projects, exhibitions, write grants, etc. through the UMVA's non-profit 501(c)3 status and fiscal sponsorship
- Opportunities to collaborate with other artists
- Have the support of an organization with a strong Maine voice when needed
- Your idea here! (the UMVA has always been about people taking ideas and running with them -- while receiving lots of support from the organization).
The Portland Art Gallery offers a discounts to groups of 20 artists- tailor made for non-profit organizations such as The Union of Maine Artists. An artist who is interested could use the Union of Maine Artists to gather together enough other interested artists for the discount, and perhaps even develop a plan to finance the costs. So the gallery is not really excluding anyone by charging a fee. Artists are excluding them selves by not taking proactive actions if they feel that the Portland Art Gallery's way of doing business will work for them. And they can try to negotiate terms and ideas - ( a group show as suggested above ?)That is how the free enterprise system works for some, although I can't speak for the Portland Art Gallery but one doesn't know unless one tries.