Is My Art a Tax Deductible Purchase?

You’ve seen other creators saying that purchases of art for their businesses are 100% tax deductible. We’re all flooded with claims that you need to make purchases before the end of the financial year, and you likely don’t want to miss an opportunity to sell your art too.

But is your art a tax deduction? Let’s dive in.

First of all, we LOVE working with creatives, it’s a special line of work, and we love seeing artists put themselves out there to sell! It takes guts. However, when it comes to tax and deductions, it’s rarely that simple. If someone tells you a purchase is a one hundred percent tax deduction, unless it’s your accountant speaking to you, we’d recommend you proceed with caution. Tax and tax laws change all the time, even if something was a fantastic tax deduction last year, there’s always the chance, the marker will have moved on that thing.

Can a small to medium sized business claim a 100% tax deduction for art?

A small to medium sized business is one that turns over less than $10million annually. It’s all over social media that this deduction for purchasing art is a fact, and while it *can* be true, it is a bit of a grey area. This year, the piece of art would need to be under $20,000 to get a deduction in full, rather than depreciate over multiple years - it falls under the instant asset write off scheme.

You could purchase some art for $25,000, absolutely, however that would need to be depreciated over multiple years, rather than just this one.

The art would need to contribute to your income earning activity.

So how does a piece of art hung on your wall contribute to your income? A computer you work at every day, or a coffee machine in your cafe, your paint supplies - they’re obviously contributing to your bottom line and positively impacting your profits. 

The ATO may not allow a claim for artworks that are away from the client experience. 

If the artwork acquired by the small-medium business contributes to, or enhances the client experience, and therefore makes them more likely to enter your premises, and/or make a purchase of some kind, then the artwork would become deductible.

You could argue that an artwork contributes to improved employee productivity, and thus improves your profits. If this is a reasonable argument, then the artwork could be deductible, but may need to be justified further.

If you work from home, can art be claimed?

We can’t see any situation where art would be deductible for a home office - you can claim furniture and equipment for your home office but art would be a wild stretch. Sorry.

Bottom line - don’t sell, or make purchases based on advice you see online.

Art is a beautiful and valuable contribution to the way we live, and we can’t speak highly enough, of the role art plays in society.

In general though, if you want tax advice, and want your business to make solid financial decisions, talk it through with your accountant. 

Don’t feel comfortable talking to your accountant? Drop us a line. We structure our fees in a way that makes us accessible to our clients, ALL year round.