Ca$h in on Tax Rebate Check$

Art Business News, Oct, 2001

Tim Thiesing first saw an original oil painting in May and almost bought it, but balked at the $600 price tag. Then, a few weeks later, he got a letter from the IRS telling him he would receive a $300 tax rebate check in late September, and his mind quickly raced back to the painting."It took me about two seconds to decide how I would spend the (rebate) check," Thiesing said.

The painting hangs at the Nielsen Frame Studio and Art Gallery in Minneapolis, a gallery near Thiesing's home that he pops into about once a month. While the $300 government rebate will only cover half the cost, Thiesing easily justified the additional $300 expenditure.

"To me, the check is like found money. The IRS isn't known for giving gifts, and that's how I look at this. So I'm going to spend it on something nice," he said.

Words like that are music to all retailers' ears--including everyone in the art world. From framers to poster shops, this "found money" could end up in the tills of galleries as many retailers will be on the receiving end of part of the $40 billion rebate.

Thiesing's idea to spend the money, not put it in savings, is exactly what the Bush administration wants Americans to do with the rebate. Bush hopes the rebates will jump-start a sagging economy. Undoubtedly, the art world will benefit from some of the rebate money. Even if it's only one percent, that's still $400 million.

One thing is certain--if Americans stash the money in a savings account, it won't do anything in the near-term for the economy. With hints from the president to spend along with urges from economists, Americans might be programmed to part with the dollars. Plus, it's not like Americans ever needed much of a shove to go out and shop.

Lyle Sorenson, owner of Nielsen Frame Studio and Art Gallery, said the tax rebate check could be a shot in the arm to his softening art sales. "Our framing business has been pretty busy, but our art sales have been soft," Sorenson said. "I think people spent money on framing what they already have, not going out and buying new pieces."

Sorenson's gallery showcases mostly local artists with most of the works ranging between $300 and $1,200. "A tax rebate check here could get you something nice, especially if it's combined for $600," he said.

Most financial gurus point out that the check is really too small to save. Even if it was worth investing, the recent stock market performance isn't luring many investors. Also, the $300 (the maximum rebate) will do little in the way of interest bearing in a checking account.

So, what's on the possible shopping list for those receiving the rebate? The $300 can take care of a framing project someone has been putting off for months (or years). Or, the rebate could be a nice down payment on a serigraph on linen that retails for $1,500.

For couples, the options broaden. Pooling the rebate results in $600, which can take buyers further toward original works, sculptures or commissioned art.

"It could be enough to push someone into a gallery," Sorenson said. "We also see some of the rebate going toward Christmas gifts for people looking just a little bit into the future."