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:

  1.  A company’s physical environment adds to or detracts from the experience of doing business with them.
  2. The Australian federal government’s $20,000 asset write-off  can be used to offset the cost of buying original artworks for the workplace.
  3. Buying art for your business is an investment.
  4. Artwork in your business can help set emotional tone for clients and customers, help communicate the company’s values.
  5. Original artwork helps your business be memorable by being unique and interesting.
  6. Artwork helps in the design of a comfortable, inspiring work space for employees.
 Although I didn’t understand it all, here are the relevant details as I read them from the ATO:
  1. The tax write off is for business assets of any kind, not just artwork.
  2. Businesses with an aggregated turnover of less than $2 million [edit:often $10 million]  are eligible.
  3. This incentive is applicable only until June 30th 2017, replacing a usual threshold for immediate deduction of $1,000.
  4. Any items costing more than the current threshold are deducted over time, rather than entirely in the current financial year.
  5. 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.

  1. If the artwork is tangible and displayed in an open viewing area it is depreciable in nature as over time it will deteriorate.
  2. If the artwork is used in conjunction with the taxpayer’s business activities,  in premises used for taxable purposes, it qualifies

Well, while that’s nice, what does it really mean to an actual discount on the overall cost of a painting?

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.

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