With the announcement of the Archibald Prize this Friday, media attention will be focused on the value of the winner’s purse, which this year is $100,000.
Not that well known is the fact that, currently, art prize earnings are assessable income for professional artists. The marginal tax rate (including medicare levy) is 39% for taxable income between $135,000 and $190,000; and 47% for taxable income in excess of $190,000.
Tax on the Archibald Prize winner’s purse for a professional artist could reduce the amount they actually receive from the Art Gallery of NSW quite significantly.
However, one of the proposals from the recent National Cultural Policy forums could exempt art prize winnings from taxation.
There are two possible scenarios should this proposal become law:
- expenses related to art prize winnings would no longer be deductible; or
- such expenses would continue to be deductible.
Option 1 would align the treatment of non-assessable art prize earnings with NANE (non-assessable non-exempt) income in the Australian taxation system. That is, art prize earnings would neither be included in assessable income nor classified as exempt income, so that they are not taxed and do not affect tax losses.
A key feature of NANE is that deductions in generating such income are not deductible. In the case of art prize earnings, these deductions would include: art prize entry fees, materials and supplies, framing costs, freight expenses and travel costs, to name a few categories.
Option 2 would allow professional artists to continue to claim all of the deductions listed above, regardless of whether they won any art prizes. Such a policy would truly be a win for the visual arts industry.
Otherwise, the tax treatment of art prize earnings will become analogous to the way the ATO considers gambling deductions – which are specifically prohibited, enabling gambling winnings to be tax-free.
The government knows that, on the balance of probabilities, more people lose than win from gambling. Similarly, more professional artists do not win major art prize earnings than the ones that do.
A communications kit for the National Cultural Policy is provided at this link: https://communicationsgovau.app.box.com/s/1tuiy99lyp9573o2jzaor85zfxvxlrx9
Anyone with an interest in the cultural policy can have their say until 11.59pm (AEST) on Sunday 24 May 2026.
For more information visit their website:
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Artwork details:
Stieg Persson
Virginia and Cora
Oil on linen, 177.8cm by 127.1 cm
Finalist, Archibald Prize 2026