Lawyer Nicholas O’Donnell unpacks the difference between a “freeport” in Delaware and the use of a freeport in another country:
There is no tax avoidance, only tax deferral. The facility is supervised by Luxembourg customs. Every item is scanned, and customs has the right to inspect anything. Origin, shipper, export license, tax status, consignor and invoice are all recorded. The key advantage is that an object can arrive there, not be subject to customs duties by virtue of it arrival, and then be bought or sold. The legal fiction, under the right circumstances, is that it never entered the country. They are not permanent tax holidays, however, they are rather intended to reduce the number of transactional events at which some customs or tax might be collectable.
Sales tax stands on a slightly different footing. […]
Update: (A previous version of the post O’Donnell published reversed the process. This is the corrected version on his site now:)
The touchstone is the point at which the buyer takes title and possession. If the gallery sells an object in a state with sales tax and ships it to the buyer in a state without one, sales tax will probably not be due. By contrast, if the buyer makes the purchase and assumes title and possession in a state with a sales tax to move the property to its sales-tax-free jurisdiction, it is likely too late to avoid sales tax.
The New Domestic “Freeports”: Sales and Use Taxes Opportunities and Risks (The Art Law Report)