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Artists Seek Same Break as Collectors

The Whitney's director leads a campaign to get fair-market tax deductions for artists who donate their own works to nonprofits.

March 26, 2000|SUZANNE MUCHNIC | Suzanne Muchnic is The Times' art writer

"The question I put to every congressman is this," said Maxwell L. Anderson, director of the Whitney Museum of American Art in New York. "If a wealthy collector can buy a painting, donate it to a museum and claim a deduction for the fair market value of the painting, but the artist can't, where does that figure into a tax-equity formula?"

Artists--who can only claim an income-tax deduction for the cost of materials when they give their own work to a cultural institution--have been asking the same question for many years. So have writers, composers and other creative people who would like to get the same break as other American taxpayers. Finally, an effort to correct the apparent inequity is gathering steam in Washington.

The Artists' Contribution to American Heritage Act of 1999, a bill before the House Ways and Means Committee, would amend the Internal Revenue Code "to provide that a deduction equal to fair market value shall be allowed for charitable contributions of literary, musical, artistic or scholarly compositions created by the donor."

If the bill becomes law, it will reverse a change in the income tax code effected in 1969, as part of a sweeping attempt to correct perceived abuses. This isn't the first attempt to amend the '69 rule, but Anderson--who has spearheaded the bill--says there's no time like the present to try again. What's more, he has a personal reason for bringing the long-smoldering issue to the attention of the creative community and their elected representatives.

A Harvard-educated American, he directed the Michael C. Carlos Museum at Emory University in Atlanta and the Art Gallery of Ontario in Toronto before taking charge of the Whitney in September 1997. While working in Toronto, he noticed that Canadian artists--who have the same privileges as other Canadian taxpayers--gave many more of their works to museums than their American counterparts.

"After three years of accepting artists' donations to the museum I directed in Canada, I found it jarring to come back here, to a sensibility [that treats] artists as outcasts rather than part of the larger society," Anderson said. "One thing that strikes me as particularly unfair is that patent holders have the right to donate ephemera around patents and receive a fair market value deduction, but artists don't. There should be tax equity among all Americans."

He took the issue to his colleagues in the Assn. of Art Museum Directors and soon became chairman of a task force charged with drafting a bill and seeking support on Capitol Hill. Last spring he traveled to Washington with a legislative aide from the association, met with several congressmen and found a willing sponsor in Rep. Amo Houghton (R-N.Y.).

Anderson is pleased to have played a leadership role, on behalf of the Whitney, in attempting to amend the tax code. "The Whitney is the institutional advocate of American artists, so it's the place that should lead the charge," he said. "I'm very proud that we were able to get this into congressional inquiry."

Under terms of the bill, artists can only donate works they have created at least 18 months before making the gift. That proviso was established "to answer a predictable and reasonable charge that artists could just paint a tax deduction," Anderson said. "There has to be a legitimate lapse of time [between the creation and the gift]."

In addition, the donor must get a professional appraisal of the donation. Among other restrictions, the value of the gift cannot exceed the artist's income from similar work during the taxable year. Qualified recipients are museums, libraries and other nonprofit institutions whose purpose or function is related to the gift.

Anderson said he found "nothing but openness to the debate, on both sides of the Hill," partly because the bill applies to a broad spectrum of creative people. What's more, he said, the bill passed an important test when the Internal Revenue Service assessed its fiscal impact. "We found that the impact would be extremely modest, even if the institutions received a lot of gifts from a lot of artists."

So far, he and his colleagues have encountered no opposition at home either. "The per capita income of most creative individuals is so far below the radar screen that this shouldn't even be an issue," he said. "It's a matter of tax equity."

If the Ways and Means Committee poses no obstacle, the bill will go to the Finance Committee, which would introduce it into the Senate. The fiscal impact of the bill is "so negligible" that it is likely to be attached to an omnibus tax bill, he said. If that's the case, the bill could become law in the next few months.

Nonetheless, broad-based support is crucial, Anderson said. He and his colleagues are circulating letters encouraging recipients to remind their elected representatives that the current income tax code deprives American museums of artworks they cannot afford to purchase, and that many artists cannot afford to give away their work without an appropriate tax deduction. Meanwhile in Los Angeles, artist June Wayne has joined the movement in a letter asking her friends and associates to draft letters of support to their representatives and senators.

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