Today, always interested in ways to align valuing original art with practical needs and helping artists make a living, an article entitled “Buying Art For The Office Has Never Been Smarter Than Now With A Government $20,000 Tax Incentive” captured my attention. Also wary of marketing hype I like to get to the gritty details of a thing and find out what it really means.
Here’s the basics of what I loved about what this article says:
- A company’s physical environment adds to or detracts from the experience of doing business with them.
- The Australian federal government’s $20,000 asset write-off can be used to offset the cost of buying original artworks for the workplace.
- Buying art for your business is an investment.
- Artwork in your business can help set emotional tone for clients and customers, help communicate the company’s values.
- Original artwork helps your business be memorable by being unique and interesting.
- Artwork helps in the design of a comfortable, inspiring work space for employees.
- The tax write off is for business assets of any kind, not just artwork.
- Businesses with an aggregated turnover of less than $2 million [edit:often $10 million] are eligible.
- This incentive is applicable only until June 30th 2017, replacing a usual threshold for immediate deduction of $1,000.
- Any items costing more than the current threshold are deducted over time, rather than entirely in the current financial year.
- If the business has previously opted to not use simplified deduction rules they can change their mind for the advent of this higher threshold.
On another page I found an expert who verifies that artwork is included in the immediate deduction.
- If the artwork is tangible and displayed in an open viewing area it is depreciable in nature as over time it will deteriorate.
- If the artwork is used in conjunction with the taxpayer’s business activities, in premises used for taxable purposes, it qualifies
If you are a company, the small business tax rate is 27.5% on any income. Therefore you save 27.5% on the painting by deducting it as a business cost, presuming other tax concessions and deductions have not previously reduced your taxable income.
If you are a sole-trader the tax rate varies, after certain thresholds, and you could save 0% – <%45 depending on your taxable income.
These rates apply on buying an artwork (or other asset) individually priced up to $20,000 in the 2017 financial year, and up to $1,000 at other times.
Of course, Intrinsic Motivation and Rewards are of greater value to my mind.