A Tax-Free Art Haven In New York City

Foreign trade zones—FTZs—are zones in the United States where the manufacturing of products can avoid the tariffs typically incurred on the import of raw materials. Like the so-called free-trade zones of Luxembourg and Switzerland, FTZs essentially allow manufacturers and importers to skip taxes and fees due to special jurisdiction.

In April 2018, the second FTZ dedicated to storing fine art opened in the US, this one in New York City (the first, oddly, was in Delaware). The art stored in the facility, which is called Arcis, is technically “no longer in US customs territory”—as long as it remains within the warehouse.  

But the art is still subject to New York state taxes, and if it's ever sold and exits the confines of Arcis warehouse facility it will still be subject to customs elsewhere. Atossa Araxia Abrahamian asks in this article: why construct a facility of this order, which probably won't save art collectors any substantial tax money? 

This question causes her to delve into the complex interactions between art and finance, as well as the history of free ports back to early modern Europe—it makes for essential reading.