New York’s attorney general says the auction house helped eight collectors pose as art dealers to avoid paying taxes on art buys. Sotheby’s admits no wrongdoing.

Sotheby's settles for $6.25 million over clients' tax evasion on art purchases after a New York investigation.

Sotheby’s has agreed to pay $6.25 million to the state of New York and implement several reforms to resolve a tax fraud lawsuit filed by Attorney General Letitia James. The lawsuit accused the auction house of assisting clients in evading sales taxes on millions of dollars worth of art purchases.

The terms of the settlement in New York allowed Sotheby's to resolve the issue without admitting any wrongdoing

The auction house Sotheby's will pay $6.25 million to settle charges that it helped art buyers avoid paying taxes. It said the auction house encouraged buyers to state fraudulently that they were acquiring works for resale later.

Employees at the auction house nudged wealthy clients to use questionable strategies in order to dodge millions in taxes, according to New York's attorney general.

New York’s attorney general said in a lawsuit that the auction house had helped collectors avoid tax payments on art purchases.

Thursday's settlement resolves claims that Sotheby's let at least eight clients cheat New York state from 2010 to 2020 by using "resale certificates" that falsely portrayed them as art dealers entitled to tax exemptions,