The Rockport City Council, at its regular meeting Tuesday, Jan 12 unanimously approved support of a proposal by the Rockport Cultural Arts District (RCAD) for a legislative initiative to exempt from sales tax original works of art sold in the RCAD.
There are 24 businesses within the RCAD that sell art that could qualify for the sales tax exemption.
RCAD Executive Director Jennifer Day said, “It is an initiative driven by the desire to attract artists and art collectors (to sell in the district).
“RCAD is asking the city for support to pursue bracketed legislation (that would allow this sales tax exemption only inside the RCAD).”
She noted Louisiana provided this exemption in the aftermath of Hurricane Katrina in an attempt to get people back engaged in their communities.
Day said all reporting burdens will fall on the seller of the art, meaning an individual artist or retailer.
She said the majority of RCAD retailers support this initiative, and “local artists I’ve talked to are supportive.”
Day said the impact of a sales tax exemption isn’t just for artists and retailers, but also hotels, restaurants, etc. that would benefit from increased sales.
Day noted she is in the process of contacting Rep. Geanie Morrison and Sen. Lois Kolkhorst (who would presumably carry the legislation). Morrison’s aide told her to garner local support first, which is what she is currently doing.
“We have time to see if we can make it happen this legislative session,” said Day.
Councilman Mike Saski thanked Day for the work and effort she has put into the initiative thus far.
“I wish we could find hundreds of these (initiatives to spur the local economy),” he said.
Councilman Bob Cunningham said he isn’t concerned with the amount of money the city could lose in sales tax revenue, if the legislation is ultimately approved. His concerns are any additional administrative responsibilities for the city.
Day said the city will not be burdened with additional paperwork.
Cunningham asked if Louisiana has generated any stats showing that sales tax revenues picked up in other areas (i.e. – hotels and restaurants) after granting its sales tax exemption for original art.
Day said Louisiana does have such reports, but she has not seen them.
She said sales tax revenue generated by art sales through the Rockport Center for the Arts was about $1,800 (City of Rockport and Aransas County combined) in 2016 (pre-Hurricane Harvey), and about $800 in 2019. This does not include sales tax revenue generated by original art sales through other outlets.
Cunningham also asked if the proposed legislation will have sunset provisions (where it can be reviewed for its effectiveness at a later date).
Day said that is something RCAD can investigate. She added Louisiana pulled the exemption when the state had financial issues.
Cunningham asked that the proposed draft of legislation be presented to council before it is introduced in Austin.
Day said this same initiative will be shared with Aransas County commissioners, as well.
“If they don’t support this, we won’t pursue it,” said Day.
Mayor Pro-tem J.D. Villa made the motion to support the RCAD’s legislative initiative to exempt from sales tax original works of art sold in the RCAD. Saski seconded the motion, and it carried unanimously.