A lot of art world questions that might normally be the purview of art critics, curators, dealers, historians and artists themselves increasingly are being decided these days in courtrooms by judges. A series of judicial rulings in England and Belgium involving a group of six video installations by artist Bill Viola and a light sculpture by Dan Flavin, which had been purchased in New York and imported to London, raised the what-is-art question once again. The issue was how these imports should be taxed -- at five percent valued-added tax, which is standard for works of art, or at 20 percent VAT if the objects are deemed purely electrical devices and, over a period of four years, three different courts have ruled on the matter. The final opinion was delivered by the European Commission's Court of Justice, which decided that they should be classified as "projectors" and "wall light fittings," since they only operated when one turns on a switch.
"It is not the installation that constitutes a 'work of art' but the result of the operations (the light effect) carried out by it," the EU court ruled. The decision meant that the buyer of the artworks, the London-based Haunch of Venison gallery, was required to pay a tax of £36,000 (or $57,646) rather than £8,500 ($13,611). The higher VAT of 20 percent is the amount added to ordinary consumer goods and services. Artists whose work involves some degree of electronics, or just needs electricity, and who may sell their work to buyers in any of the 27 member nations of the European Union want to take note. The price of being a new media artist has gone up by way of a tax.
This isn't the first time that modernist sculpture has faced the uncomprehending eyes of the tax man, but the precedent had gone the other way. Back in 1926, Marcel Duchamp brought to the United States from Paris a number of pieces by Roumanian sculptor Constantin Brancusi, including his 1923 abstract work "Bird in Space." After puzzling over this polished bronze, U.S. Customs slapped a 40 percent tariff on the artwork as a manufactured metal object rather than viewing it as a duty-free work of art. Part of their problem was that the law was ambiguous. Objects could be defined as original works of art under the 1922 Tariff Act if they had no practical purpose and had been produced by a professional sculptor, but an earlier Customs Court ruling had defined sculptures as art only when carved or chiseled representations of natural objects "in their true proportions." It wasn't until 1928 that a Customs Court judge ruled that "Bird in Space" was a work of art, the first legal affirmation of abstract art.
The more recent matter see-sawed over a period of years, with the Flavin and Viola objects first ruled by U.K. Customs not to be sculptures, a decision that was overturned by the U.K. Tax Tribunal. Where there are different rulings within a specific EU country, the matter is raised to the Customs Code Committee of the European Commission (which consists of representatives of all 27 EU member states) where the original U.K. Customs decision was upheld. The British Art Market Federation has called upon U.K. Customs to reevaluate its process of determining which types of imports should be taxed at different rates, and a number of other art trade and museum associations in EU countries also issued statements opposing the designation of art by U.K. Customs and the European Commission's Court of Justice. "It is indeed true that works by Viola and Flavin are not deemed as artwork for import purposes," said Graham Southern, the London art dealer who represents Viola in the U.K. "We obviously strongly disagree with this ruling and clearly the consensus of the art world (curators, artists, dealers, collectors) is that this is a very troublesome decision."
It is unclear whether or not any other artists who use electronics or electrical elements in their work have faced this situation, although the number of artists who are employing technology in their sculptures and installations has increased significantly over the past several decades. For practical reasons, artists disassemble these objects in their studios when they prepare to ship them, but that creates the situation in which a customs official opens the crate only to find various pieces of electronics, metal and wires that don't look like a work of art. Not disassembling the piece but packing it exactly as it is intended to be seen may help convince a customs official that the object is a work of art -- maybe.
Sergio Munoz Sarmiento, a sculptor and arts lawyer in Brooklyn, New York, recommended that artists in the U.S. who send their work to an EU country should "pack and crate the artwork differently than one would ordinarily pack and crate regular lighting, and it should be insured at a higher value than a regular piece of hardware." (The downside of a higher insurance value is that a customs official might still determine that the object is just an electronic device but tax the piece at the higher value.) Additionally, if foreign customs officials don't get the hint, artists might "include a document written by an art critic or art historian that indicates that what is in this box is not just a piece of hardware but a work of art." Pierre Valentin, the lawyer in London who represented Haunch of Venison in its appeals of the original U.K. Customs decision, recommended including in the crate drawings of how the disassembled artwork is to be reassembled, as well as a certificate of authenticity from the artist. "That might help," he said, but he did not sound convinced. "The problem that occurred with these works by Flavin and Viola will happen again, I just don't know when."