Capital Gains Tax on Wine Us: Sales, and Auction Fees
Updated
When considering the financial implications of your fine wine collection in the United States, understanding capital gains tax on wine US owners face is a key factor. For precise information on your individual tax obligations related to wine sales, Christie's recommends you consult your own independent tax advisor with any questions. This article details the tax considerations and fees you may encounter when buying or selling wine at auction in the US.
What taxes apply when you buy wine at auction in the US?
When you acquire wine at auction in the US, you are responsible for applicable sales or use tax, in addition to a buyer's premium. Christie's, for example, charges a buyer's premium of "25% of the final bid price of each lot" for wine, as stated in their New York Conditions of Sale, Wine. Taxes are payable on this premium at the applicable rate. The successful bidder is responsible for "any applicable taxes including any sales or use tax or equivalent tax wherever such taxes may arise on the hammer price, the buyer’s premium, and/or any other charges related to the lot," according to Christie's.
For lots collected directly from Christie's in New York, the auction house "shall collect New York sales tax at a rate of 8.875%." If you arrange for shipment to states other than New York, Florida, New Hampshire, and Wyoming, or to international locations, Christie's "shall collect New York sales tax at a rate of 8.875%, regardless of the destination of the lot(s), prior to collection, unless there is a tax exemption on file." If you claim an exemption from sales tax, you must provide the appropriate documentation to Christie's "prior to the release of the lot or within 90 days after the sale, whichever is earlier." Understanding these costs is crucial when evaluating potential purchases. You can explore US auction results to see how these factors influence the final price. For a comprehensive overview of all potential costs, consider using a landed cost calculator.
What are the fees and storage considerations for auction purchases?
Beyond the hammer price and buyer's premium, you may incur storage fees if you do not collect your wine promptly after an auction., Christie's charges a buyer's premium of "25% of the final bid price of each lot" for wine.
Buyers are expected to remove their purchased property "within seven calendar days of the auction," according to Christie's. If lots are not collected "within 120 calendar days of the conclusion of the auction," Christie's will store them at the buyer’s expense and risk. Storage is with a third party, The Wine Cellarage, at its New York storage location. The buyer "agrees to the applicable terms and charges as set out at https://winecellarage.com/wine-storage/."
Payment for purchases can be made through various methods. These include wire transfer, credit cards (Visa, MasterCard, American Express, and China UnionPay, though an administration fee applies to credit card transactions), bank checks, and checks drawn on a US bank in US dollars. Cash, money orders, or travellers checks are also accepted, subject to "a maximum aggregate limit of $500 per buyer per year," as detailed by Christie's.
Proper wine storage is essential for preserving your collection's value, which is a key aspect of fine wine investment.
What are the shipping rules and associated costs for auction wine?
Shipping wine from auction in the US involves specific rules, state limitations, and additional fees depending on the destination. Christie's "currently ship to New York, Florida, New Hampshire, and Wyoming."
Specific limitations and fees apply to certain states:
| Destination State | Shipping Limit | Additional Fees |
|---|---|---|
| New Hampshire | No more than twelve (12) 9-liter cases or equivalent of wine to any one consumer in any calendar year, and no shipping to dry town Ellsworth | Eight percent (8%) of the hammer price plus buyer's premium, exclusive of sales tax |
| Wyoming | No more than 108 liters to any one household within any twelve (12) month period | Twelve percent (12%) of the hammer price plus buyer's premium, exclusive of sales tax |