Anyone who has ever bought or sold art in New York knows that the taxes and transaction costs can be lofty—and now they could intensify.

New York State Senator Robert D. Jackson recently proposed a bill that would impose a tax on art, antique furniture, and antique jewelry sold at auction. It would also amend the state finance law to establish an art education fund to provide assistance for art supplies for public school students.

Though the proposal is at an early committee stage, and would have a long way to go before making it to law, the effort, which was flagged in a recent blog post by the art law team at Withers, suggests that state lawmakers are specifically looking at the art market as a way to raise revenue after a challenging economic year.

The proposed tax rate would be the greater of either $1 or .3 percent on the receipts from the sale of art. (Given that ratio, it’s safe to say that any such tax, if applied, would never be $1.) The tax would be imposed on the purchaser and collected by the auctioneer in addition to state and local sales tax, according to the bill.

“It’s interesting to see that it’s specifically targeting auction sales,” says Amanda Rottermund, an associate at Withers. In New York City, the sales tax rate on art is 8.875 percent, so that “would effectively raise the transaction cost to over nine percent,” she says. “If you’re the buyer, you would be saying… it’s getting a little bit high.”

State Senator Jackson added that the bill includes all auctions, not just art auctions. “Auction houses represent the greatest markets in the industry and they are transparent in regards to the auction results,” he told Artnet News in an email. “Most auction houses collect fees in the double digits. This tax would be less 0.3 percent.”

If the proposal becomes law it might also motivate sellers to turn to a private dealer or gallery. A transaction cost could also be shifted to buyers and ultimately make an artwork more expensive. Buyers and auction houses routinely strategize about whether to sell a particular work in, say, Paris, London, or New York, and in which season. “I think a lot can be seen in terms of the post-Brexit world in London. We’ll see more things out of Paris, but there, they have artist resale royalties, whereas we do not have them here. If we had something like this, you would run the numbers to see what the total transaction cost is,” said Rottermund.

Others in the art industry are skeptical. “The proposed .3 percent tax itself won’t drive people away from the auction houses, but it definitely won’t help them attract business to their New York auction rooms,” attorney Thomas Danziger said. “Given the perennially increasing auction house fees and various state and local sales taxes, at a certain point, the high-end New York auction buyer will be boiled alive like the frog in the cook pot and may well look to other places to buy art.”

But the arts education fund may strike others as a worthy silver lining.

“I have championed public education for decades, especially the issue of equitable funding for our schools,” Jackson said. “Funding for art education was precarious before the pandemic, and now it is even further in jeopardy as belts tighten.” The proposed tax would “provide a steady stream of revenue for all forms of visual art education, field trips for students to institutions recognized by the New York State Council on the Arts, and stipends for artists in residence.”

If the bill advances through committee, it would have to pass through the state senate and assembly before potentially being signed by the governor.