NY’s lap dance tax + free speech = Supreme Court review?

So-called gentlemen's clubs and the dancers they employ are easy tax targets.

Here in Texas, a "pole tax" on strip clubs went into effect after the state's high court ruled in 2011 that the Sexually Oriented Business Fee Act was constitutional.

The Lone Star State measure imposes a $5-per-customer entrance fee on strip clubs that also serve alcohol. I haven't checked it out personally, but I'm pretty sure that the fee was quickly incorporated into the cover charge to patrons. The money is designated for sexual assault prevention programs and health insurance coverage for
low-income Texans.

Utah's highest court came to a similar conclusion in 2009 regarding that state's Sexually Explicit Business and Escort Service Tax. A group of erotic dance clubs and escort services had challenged the
10-percent tax on admission fees and user fees, claiming that the tax
violated their rights to free speech and equal protection under the law.

An exotic dancer tax became law in Illinois this year. Since Jan. 1, Land of Lincoln strip clubs that sell booze or let people drink alcoholic beverages
have had the choice to charge an extra $3-per-patron admission fee or pay taxes based on how much money they make. The money goes toward rape crisis centers.

And in Philadelphia, the city recently decided to start taxing lap
dances at the City of Brotherly Love's gentlemen's clubs. The collections would be authorized, says the city, under Philly's existing amusement tax.
But the clubs say that patrons already pay a
tax in cover charges, making the move tantamount to double taxation. If the tax collection proceeds, expect this case to go to court, too.

New York to the Supreme Court? Meanwhile, a New York adult entertainment tax is entering what could be the final stages of its legal challenge.

And Nite Moves, a Latham, N.Y., club that offers lap dances, is getting some help from free speech advocates in its effort to convince the U.S. Supreme Court will hear its case.

In October 2012, the New York Court of Appeals, the state's highest judicial panel, ruled that lap dances performed at the club were not
"dramatic or musical arts performances" and therefore are not entitled to tax-free treatment afforded other New York productions.

Still fighting for free speech: Media Coalition believes that the nation's highest court would come to a different conclusion and overturn the New York ruling because it violates the U.S. Constitution's First Amendment guarantee of free speech.

The free-speech advocacy group recently filed an amicus brief with the Supreme Court urging it to review the
case, which was brought by the club's corporate owner 677 New Loudon Corporation.

David Horowitz, executive director of Media Coalition, explained via an email interview with GamePolitics.com the group's position on the New York tax:

"[Media Coalition is] concerned
that the ruling in 677 New Loudon opens the door to governments
imposing taxes on speech that it dislikes or is unpopular. … The Tax Tribunal didn't necessarily target exotic dancing; rather
it ruled that this type of dancing did not qualify for a tax exemption
for venues that provide dance performances. … [T]he government cannot use its taxing power to punish speech that is First Amendment protected." 

If the justices decide to take the Nite Moves case, the next term's oral arguments could be even more fun that the recent suits dealing with the tax issues of the health care reform law and the Defense of Marriage Act.

Keep your fingers crossed, all you tax, free speech, performance and SCOTUS watchers!

More media matters: In case you were, like me, wondering if there was another, more directly media related reason for the advocacy group's interest, there is.

Media Coalition would like for the U.S. Supreme Court to hear the exotic dance club case on its merits, Horowitz told GamePolitics, so that it "can reaffirm its ruling in Arkansas Writers'
Project, Inc. v. Ragland, (481 U.S. 221, 230 -1987) that the imposition
of taxes on media based on the content of the speech is incompatible
with the First Amendment."

I started my journalism career as newspaper reporter and I know we often cultivate seemingly incongruous relationships to get our scoops, but this certainly is among the more interesting working partnerships.

Photo by natalie-claude/iStock

You also might find these items of interest:
 
 

• 'Sex therapy' is not a medical deduction
• Nevada decides against taxing one sin
• Exotic dance, artistic performance: tomato, tomahto, taxes