Advocacy
Fair-Market-Value Tax Deduction
Federal legislation that would allow visual artists, composers, and authors to claim a tax deduction for the fair market value of works donated to collecting institutions continues to make incremental progress on Capitol Hill. The legislation would improve current law, which generally allows artists to deduct only the cost of materials, rather than the fair market value of the work. As of August 1, its supporters number twenty-six in the Senate and fifty-five in the House, almost evenly divided between Democrats and Republicans.Although the bill is titled the Artist-Museum Partnership Act, it would in fact encompass any object donated by a creator, including literary manuscripts, musical and dance scores, and archival materials. For this reason, the associations that represent the performing arts have endorsed it, including the American Symphony Orchestra League, the American Federation of Musicians, Dance/USA, and Opera America, to name just a few. Even though their institutions may not generally collect such material, they have an interest in its preservation. The American Library Association also supports the bill.
Beyond giving artists fairer treatment, the bill is important because most collecting institutions have limited funds for acquisitions, instead relying on donations, which current law discourages artists from making. Many artists feel that current law is blatantly unfair, because it allows noncreators to claim a fair-market-value deduction for objects donated to collecting institutions.
In a perfect world, legislation would also allow artists to deduct for works given to charity fundraising auctions and allow performing artists to deduct the value of donated performances, but those issues must be left to another day. It is important to note that volunteer time is completely nondeductible, and also that objects donated by collectors for fundraising purposes are not deductible at their appreciated value. In other words, in these two respects artists are not treated differently from everyone else, unlike their treatment on gifts of objects to collecting institutions.
CAA members wishing to help advance the bills should ask their senators and representatives to cosponsor S 548 or HR 1524, respectively. All members of both chambers can be contacted via e-mail through their websites at www.senate.gov and www.house.gov. Please write to info@collegeart.org if you would like a list of current cosponsors as well as talking points that you can use to formulate your letters.
--Andrew Finch, codirector of government affairs, Association of Art Museum Directors