“Mr. Schneiderman said that state law requires sales tax to be paid when possession of a good is transferred to a buyer within New York State and that the gallery, in handing over art to shipping companies that were not common carriers like FedEx or the United States Postal Service, was legally transferring possession to the buyer at that point.”

Randy Kennedy had a report in the NYT yesterday that Gagosian Gallery has agreed to pay New York State $4.3 million in back sales tax, interest, and penalties.  There were a number of different issues in play, but one of them is the one I quoted in the header above – and that kind of silly formalism has never made any sense to me.  If it’s a legitimate out-of-state sale – there’s no game-playing going on, the buyer genuinely has a home somewhere else – why should it matter whether the work ships by FedEx or by common carrier or by horse and buggy?