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The Insider June 2 

Crystal clear, not Alice Walton, who announced last week that the Walton Family Foundation will build a $50 million museum with an art collection worth twice that in her home town of Bentonville, has paid sales and use taxes in Texas for art she personally has purchased. However, the Walton Family Foundation, which also has purchased works for the museum — including a painting worth at least $35 million bought at auction in New York City — continues to maintain that it owes no sales taxes on its purchases because it has not brought the art to Arkansas. “Crystal Bridges Museum will not be built until 2009. As such, no paintings have been brought to Arkansas and therefore are not yet subject to Arkansas sales and use taxes,” the foundation said in reply to an inquiry by the Times. Any taxes owed will be paid when the painting is brought to Arkansas, the foundation said. But state law says sales taxes are due at the date of purchase, not when it arrives in Arkansas, according to Tim Leathers, deputy director of the Department of Finance and Administration. A $35 million purchase would bring more than $2 million to the state and another $1 million to Benton County and Bentonville. But after Aug. 10, the museum will be exempt from state sales and use taxes, thanks to a bill brought by Rep. Horace Hardwick, R-Bentonville. Does anyone care? Benton County Judge Gary D. Black told a reporter he hadn’t thought much about the sales tax exemption for the Walton museum. Does he care? “Sure we care,” he said. He said the county is going to have to ask for a half-cent sales tax increase to pay for much needed bridge and road repair. Initially, Walton declined to be specific about what tax had been paid, stating only that she and the foundation “fully comply with applicable state tax laws.” The statement added, “The legislation adopted earlier this year in Arkansas parallels the laws in other states and will allow Crystal Bridges to compete on equal terms for artwork with other museums and facilities in states around the nation. We believe the legislation is good public policy that will encourage economic and cultural development in Arkansas.” Marketing representatives for the Walton museum said they were surprised at the number of questions they were getting on the tax at last week’s announcement, in light of the fact that Walton planned to build and furnish the museum at her own expense. They were not aware that Arkansas does not exempt its art museums — save Crystal Bridges — from paying sales tax. Nobody has yet explained why, if the tax exemption is good public policy, the legislature was asked only to give it to the Walton museum and no other ones in Arkansas. Exploring Little Rock lawyer Chuck Banks, a former U.S. attorney, confirms that he’s weighing a Republican primary race for lieutenant governor. He’d provide a more moderate voice in a race that already has three announced candidates, Sen. Jim Holt, Rep. Doug Matayo and Baptist preacher Jim Lagrone. And, on the Democratic side of this race, Star City Mayor Gene Yarbrough says he’s “toying” with the idea of running. Yarbrough, 62, is president of the Arkansas Municipal League through July and isn’t likely to decide anything before then.
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