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California Statute - Civil Code § 986, California Resale Royalties Act

Cal. Civil Code § 986 (California Resale Royalties Act).


Adopted in 1976, the California Resale Royalties Act is the only U.S. law -- state or federal -- to have recognized resale royalty rights (droit de suite) for visual artists.  It was struck down in 2012, after a California federal district court held that it violated the Commerce Clause of the U.S. Constitution. That decision is currently on appeal the the 9th Circuit.

Under the CRRA, when an artwork sold for more than $1,000, the artist or his heirs (for a period of 20 years after the artist’s death) were entitled to a 5% royalty on the total sale price, to be paid by the “seller or the seller’s agent.”  The royalty did not attach to “initial sales,” such as sales made by an artist directly.  Rather, it accrued each time an artwork was resold by a gallery, dealer, auction house, broker, museum, or other seller’s agent.  Royalties could be collected on sales that took place in California, or on non-California sales when the seller was a California resident.

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