Californians who resell art out-of-state will no longer have to pay a statutory royalty to the artist. Under the California Resale Royalty Act, a seller was required pay a five percent royalty to the artist if the seller is a California resident selling out-of-state or if the sale takes place in California. That out-of-state provision is an unconstitutional violation of the Dormant Commerce Clause, the Ninth Circuit, sitting en banc, ruled on Tuesday.
Under the Act, if a San Franciscan auctions off a sculpture by a German artist in New York City, the artist is owed the royalty. Similarly, a royalty is required if a Brazilian businessman buys a photograph by a Chicago artist while passing through LA. Change "San Francisco" to "Paris" or "LA" to "Detroit" and no payment is needed in either scenario.