Leahy Bill Encourages Artists to Donate Work to Museums Current Tax Law Unfair to Artists, Museums

June 27, 2000

Until 1969, the Library of Congress received about 15-20 donations of manuscripts from authors each year. In the four years following, the library received only one such gift.

This dramatic decline illustrates the impact on cultural institutions of a provision of a 1969 tax reform bill, which Congress passed in response to the perception that artists were inflating the market value of their own work for tax purposes. Under this law, artists are permitted to deduct only the material costs of creating the work – canvas and paint, for example – when they donate their own work to a museum. But art collectors, making an identical donation, may deduct the fair market value of the work. As a result, fewer and fewer living artists have donated their works in the 30 years since the law was enacted and more cultural artifacts are now in the hands of private collectors.

Just before the 1969 legislation went into effect, composer Igor Stravinsky planned to donate his papers to the music division of the Library of Congress, but because of the law, Stravinsky sold them instead to a private foundation in Switzerland.

"We can no longer afford this tremendous loss to our cultural heritage, which was an unintended consequence of the tax bill. It's time to level the playing field for artists." said Sen. Patrick Leahy, (D-Vt.).

Leahy, joined by Sens. Bob Bennett (R-Utah) and Joseph Lieberman (D-Conn.), has introduced legislation which would restore tax equity for artists, thereby encouraging the donation of art to museums and libraries. Artists, under the Leahy bill, would be allowed to take a tax deduction equal to the fair market value of the work. To prevent abuses, artists who donate their own creations – paintings, manuscripts, compositions – would be subject to the same rules that art collectors must follow, including providing certified appraisals.

"It is the public that benefits when artists are encouraged rather than discouraged to donate to museums. We must preserve these treasures for future generations." said Leahy.