Students exploring the University of Oregon’s Jordan Schnitzer Museum of Art may not realize how unusual it is for a university museum to display works by Paul Cezanne, Andy Warhol, Marc Chagall, Frank Stella and other luminaries.
The museum’s budget makes it difficult to snag these world-famous paintings and sculptures. But out-of-state collectors exploit tax laws that save them money on artwork if they loan newly acquired works to Oregon museums before shipping them home.
While the state of California loses millions in tax revenue per year, UO students win by having access to art that would normally only hang publicly in New York City or Paris. The Jordan Schnitzer gets so many of these individual artworks that they have a designated space for “Masterworks on Loan.”
Currently there are over 30 works in the two-room section, where a Van Gogh painting hangs behind a layer of Plexiglas and a security guard.
The Jordan Schnitzer and the Portland Art Museum have become a resting point for artworks on their way from sellers worldwide to collectors, according to a New York Times article. Oregon’s proximity to California makes it an attractive way to avoid California’s 8.75 percent tax.
Most states have taxes on both buying art and displaying art. Oregon is one of three states that has neither, along with Delaware and New Hampshire.
So California collectors buying a Warhol painting from New York would normally be subject to taxes in New York and in California.
But if they immediately lend that painting to an Oregon museum for at least 90 days before shipping it home, the art was displayed in Oregon first, making it exempt from other states’ taxes.
“We don’t know how many are doing it for a tax break, because we don’t have to deal with the legal aspects of it,” said Jill Hartz, the executive director of the museum. “Collectors, agents or lawyers might call us or write us and say, ‘You know, I have this beautiful work, would you be interested in showing it?’”
Hartz says that the tax break has many positive effects for UO. Professors from several departments bring students to the museum to analyze the art. This year close to 5,000 students have visited the museum for academic purposes.
James Harper, an art history professor who utilizes the museum’s art for his classes and has also worked at the Harvard University Art Museum, says the Jordan Schnitzer is up there with the best university museums. “It’s a great resource… It’s definitely in the top 10th percentile.”
The New York Times suggested that smaller museums, such as the Jordan Schnitzer, don’t have the expertise to show such famous art. However, Hartz said the museum is nationally accredited and is very knowledgeable about proper care of artwork.
And, to critics who say this tax break causes California to lose revenue, Harper said, “It’s not Oregon’s job to pass a law to keep California from losing revenue. It’s California’s job.”
Written by Rebecca Brewster