Delaware Has Hundreds of Millions in Art… in Warehouses!

boxGiven the financial challenges our Delaware Art Museum has faced the last few years, it is a bit ironic to read that hundreds of millions of dollars in art is sitting, packed in crates, in warehouses within a few miles of Kentmere Parkway – and no one here will ever get to see it. Graham Bowley’s article in Monday’s New York Times (Tax Laws Make Delaware a Haven for Art Collectors) details a growing local business that hasn’t gotten a lot of attention outside of a few real estate and art world insiders.

Bowley reports that, thanks to “discretion, security and tax savings,” Delaware has joined Luxembourg and Geneva “as a tax haven for art collectors.” By year’s end, there will be three of these climate-controlled, tax-free oases and the New York tax authorities aren’t exactly happy about it.


With an 8.875% state sales tax, it is easy to understand why. A $10 million painting purchased in New York City can be shipped directly to Delaware and the intrepid bargain shoppers pick up a neat $887,500 in the process – plenty to top off the Gulfstream, and then some, for the winter trip to Zermatt.

An earlier article on Artnet.com detailed the advantages of storing priceless works in places like the aptly named “Delaware Freeport” in Newark:

U.S. and foreign art collectors and dealers are flocking to a newly opened 36,000-square-foot, state-of-the-art storage warehouse in Newark, Del. The September opening of the space in a state that has no sales tax comes at a time when New York state authorities have newly tightened regulations regarding works of art.

For example, in January, the Manhattan DA launched a secret investigation into galleries and dealers allegedly using tax havens that was first reported by artnet News. Which is where Delaware comes in.

The brainchild of art logistics expert Fritz Dietl, the new Delaware Freeport offers cutting-edge security capabilities to protect against fire, water damage, and theft, as well as the added benefit – for collectors who opt to ship or store art there – of the state’s lack of sales or use tax. For New Yorkers, who have to pay 8.875 percent in tax, the advantage is obvious.

The question is, how do we make this our advantage? Maybe a little tweak to state law to require, say, 10% of the collections stored must be exhibited in Delaware public spaces or museums in order to qualify for our hospitality?

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1 Comment

  • I do not think owners of these stored works will be in a hurry to exhibit (an enterprise that takes curators, spaces, guards, traffic control, and all the elements related to physical exhibiting).

    If one looks at the recent troubles of the Delaware Art Museum, where art works are sold to pay unmanageable debt, it is easy to gauge the kinds of access residents of the town will have to visual treats from this demographic.