Resale Royalty

A resale royalty is a right entitling the artist — or their estate — to receive a percentage of the sale price when a work of art is resold commercially. It applies to secondary market transactions: the second and subsequent sales after the work first left the artist's hands. The artist receives nothing from the initial sale beyond the agreed price; the resale royalty is the mechanism by which they participate in any appreciation in value that occurs after that point. The right exists by law in over seventy countries. It does not exist at the federal level in the United States.

Why Resale Royalty Matters in a Studio Practice

The structural problem is straightforward. When a painter sells a work from their studio for $3,000 and that work eventually sells at auction for $300,000, the artist receives nothing from the appreciation. The collector, or whoever sold the work, captures the full gain. Every American artist who has watched their early work change hands at prices that bear no relationship to what they received for it has experienced this directly.

This isn't a gap in copyright law. Copyright protects reproduction and distribution rights; it doesn't govern what happens when a physical object is resold. The resale royalty is a separate right, rooted in a different argument: that artists — unlike writers, musicians, and filmmakers, whose work generates royalties through licensing and reproduction — typically profit from a work only once, at initial sale. A resale royalty would extend that participation forward into the market appreciation the work may generate.

Understanding the resale royalty matters to American artists for two reasons. First, if you sell internationally — to collectors in the EU or UK, or through galleries and auction houses operating there — qualifying sales may generate royalties you're entitled to but haven't registered to collect. Second, the policy debate over a US federal right is ongoing, and the argument for it is directly relevant to how you manage and document your practice regardless of the legal outcome.

The US: No Federal Right

No federal resale royalty exists in the United States. An American artist whose work sells at auction in New York for ten times what they originally received gets nothing from that transaction, regardless of their career status or the scale of the gain.

California was the only US state to enact a resale royalty law. The California Resale Royalty Act, signed in 1976 and inspired in part by Robert Rauschenberg's public confrontation with collector Robert Scull after Scull sold a painting Rauschenberg had sold him for $900 at auction for $85,000, required a 5% royalty on qualifying resales. That law had a difficult legal history. In 2018, the Ninth Circuit Court of Appeals nullified it — finding it preempted by the federal Copyright Act of 1976. The California act now applies in practice only to works resold in the single calendar year 1977, before the Copyright Act took effect. It is, for all practical purposes, no longer operative.

Federal legislation has been proposed multiple times — the Waxman Bill in 1978, the Equity for Visual Artists Act in 2011, the American Royalties Too Act in 2014 — and none has passed. The US Copyright Office issued a 2013 report expressing support for Congress considering a federal right. As of this writing, no legislation has been enacted, and no federal resale royalty is in effect.

The consequence extends beyond the domestic market. Because the US has no equivalent resale royalty law, American artists are not entitled to royalties from sales of their work in countries whose ARR laws operate on a reciprocity basis — meaning a country that only extends its resale royalty to artists from nations with equivalent laws. Some countries extend the right regardless of nationality; others don't. Whether you're eligible for royalties on international sales depends on the specific country's legislation and what reciprocal arrangements it has adopted.

Contractual Resale Royalties

Without a statutory right, some artists in the US attempt to negotiate a resale participation clause directly into their sale agreements. The best-known model is the Artist's Reserved Rights Transfer and Sale Agreement, drafted by curator Seth Siegelaub and attorney Robert Projansky in 1971, which entitled artists to 15% of any profit on subsequent resales when signed by the purchaser.

A contractual royalty differs from a statutory right in a fundamental way: it's only enforceable against parties who actually signed the agreement, and only for the duration of their ownership. Once a work passes to a buyer who didn't sign, the obligation doesn't follow the work. A statutory right, where it exists, attaches to the work itself and is enforceable against all qualifying resales regardless of what prior owners agreed to.

Contractual royalty provisions remain worth including in primary sale agreements when buyers are willing to sign them — particularly with collectors who have indicated they intend to hold work long-term, or in cases where the work represents a significant relationship. Their enforceability is limited but not zero.

How the Right Works in the UK and EU

For American artists who sell internationally, the EU and UK resale royalty system is the relevant framework. Understanding it matters because qualifying sales may generate royalties, and those royalties require registration to collect.

Who Qualifies and What Triggers the Right

In the United Kingdom, the Artist's Resale Right applies to artists who are nationals of the UK, the European Economic Area, Australia, or New Zealand. The right extends to estates for 70 years after the artist's death. American artists, as nationals of a country without a reciprocal resale royalty law, do not currently qualify for UK or EU ARR on that basis — though this can vary by jurisdiction, and reciprocity arrangements change. The right is triggered when a work is resold through an art market professional — an auction house, gallery, or dealer acting in a commercial capacity. Private sales between individuals without an art market professional are exempt.

How the Royalty Is Calculated

In the UK, the royalty applies on a sliding scale. Sales between £1,000 and £50,000 generate 4% of the sale price. Above £50,000, the percentage decreases in tiers. The maximum royalty on any single transaction is capped at £12,500. The EU Directive follows a similar structure, with rates and thresholds implemented by each member state; the maximum across EU jurisdictions is approximately €12,500. The royalty is calculated on the hammer price or sale price — before buyer's premium in an auction context.

The Right Is Inalienable

In EU and UK law, the resale royalty cannot be waived, transferred, or assigned. An artist cannot contractually give it up. Any agreement attempting to do so is unenforceable. This is worth noting as a structural contrast with the US situation: where a statutory right exists, no collector or gallerist can negotiate it away. Where it doesn't, every protection depends on what the artist could negotiate individually into a sale agreement.

Collecting Societies and Registration

Artists don't invoice auction houses directly. Collecting societies — in the UK, primarily DACS (Design and Artists Copyright Society) and ACS (Artists' Collecting Society) — track qualifying sales, pursue royalties from art market professionals, and distribute payments to registered members. ACS deducts a 15% commission from royalties collected. Neither automatically covers artists who haven't registered; royalties owed to unregistered artists may go uncollected.

For a qualifying artist — a UK or EEA national selling through UK or EU art market professionals — registration with one of these societies is not optional if you intend to receive what's owed. Collecting societies operate through sister organizations across jurisdictions, so registration in the UK enables collection across multiple countries with reciprocal arrangements.

What American Artists Can Do Now

Document transfers. Whether or not a resale royalty right exists in your jurisdiction, maintaining a complete record of who purchased each work, at what price, and through which channel creates the ownership history that any future royalty tracking — statutory or contractual — depends on. Collecting societies and auction houses trace royalties through sale records; the more complete yours are, the better positioned you are if the legal landscape changes.

Include royalty clauses in sale agreements where collectors will accept them. The enforceability is limited, but the conversation creates transparency about resale expectations and occasionally results in voluntary compliance.

Register with UK and EU collecting societies if you qualify. American artists whose nationality or residency qualifies them under EU or UK law, or who sell into those markets regularly, should investigate whether they're eligible and register accordingly. A collecting society that covers you in multiple jurisdictions costs a commission percentage on royalties collected — nothing if royalties never materialize.

Follow the legislative situation. Federal resale royalty legislation has been introduced repeatedly and consistently opposed by major auction houses. The argument for it is gaining ground internationally and remains active in US policy discussions. Artists who understand how the right works and what it would mean for their practice are better equipped to participate in that conversation.

An arts law organization or attorney specializing in visual artists' rights is the appropriate resource for situation-specific guidance on eligibility, contractual provisions, and international collecting society registration.

Documentation and Provenance

The provenance record that begins when a work leaves the studio is also the record that enables royalty tracking. A work with a clear, documented ownership history — buyer's name, date, price, channel — is far easier to trace when it resurfaces at auction years later. Artists who document transfers at the point of sale create a chain that serves both provenance integrity and any future royalty claim, statutory or contractual.

Related Terms

• Secondary Market
• Primary Market
• Provenance
• Auction House
• Consignment
• Copyright

Knowing which works from your practice are circulating on the secondary market, who holds them, and what they've sold for is the foundation of both market awareness and any future royalty tracking. Inquire.art keeps your catalog current from first sale forward, so the ownership history that matters to collecting societies and auction houses is already documented when it's needed.