New York state needs money has found its moral center – and it’s in Brooklyn.
New York Assemblyman Felix Ortiz, who represents Brooklyn, has proposed a new tax on strip clubs. The bill would impose a $10 per patron tax for any business that provides for any adult entertainment business featuring nude or partly nude dancers that also serves food and/or drink (apparently picnicking strip clubs would be exempt). Ortiz believes that the tax could potentially provide up to $500 million for victims of human trafficking, domestic violence, sexual abuse and child prostitution. While touting the bill, Ortiz claimed “Through this bill, New York state will continue to forge a path for other states to follow.”
Whoa, Ortiz. Not so fast. I believe that path has already been forged: Texas has already instituted a stripper tax – remarkably similar to this one. It was struck down by a judge as unconstitutional (the right to bare boobs?) and is being appealed by attorneys for the Lone Star State.
If the tax gets the go ahead (so far, no one in the Senate is touching it with a ten foot, er, stripper pole), it could help New York patch up some rather gaping holes in the state’s budget. But it’s not really about that. It’s about helping people. Right, Ortiz?
It’s not the first tax proposed in New York in 2009 affecting the adult industry. Just last month, Governor Paterson suggested a 4% tax on digital downloads: according to the state’s budget office, the tax would also apply to porn on pay-per-view cable television. While the bill is not restricted to the adult industry, opponents of the bill are calling it a “porn tax” noting that it would likely affect the industry more than others. Interestingly, conservatives oppose the bill with Conservative Party chair Michael Long lamenting, “If you’re taxing it – how can it be wrong? I don’t know how you can sink much deeper.” (Mr. Long has clearly never been to Vegas.)
With that kind of thinking in mind, there’s a lot that is apparently wrong in the State of New York. Paterson has also considered taxing sugary sodas and juice drinks in a move critics call the “obesity tax.”
Porn taxes, obesity taxes… I’m pretty sure that almost everything will be taxed in New York by the end of the year, at least if it’s considered remotely bad for you. But it may backfire. The message they’re really sending is: get your porn and sugar now.
The Texas Entertainment Association (TEA) has announced that adult cabarets (or as most people call them, strip clubs) received notification from the Texas Comptroller that the $5 stripper tax is due despite a court ruling that the tax is unconstitutional.
A Texas judge had ordered that the, “Defendants are permanently enjoined from assessing or collecting the tax imposed by sections 47.051-.056.” However, the Texas Attorney General’s Office filed an appeal on April 7. Letters were subsequently issued that while the appeal was pending, the tax would still be collected.
Hmm. Apparently the State of Texas is desperate for cash. I can’t imagine the lost revenue that would be so great during the appeal that would cause the state to collect it nonetheless. And if the appeal is defeated, what then? Will the state return the taxes? To whom? The tax is to be collected by the clubs from patrons. It would be practically impossible – and unduly burdensome – to return those taxes to patrons.
It’s simply bad policy.
On the other hand, I don’t buy the argument/drama from the clubs that: Cabaret owners may be forced to shut down. In these economically tough times, hard-working taxpayers employed by these legal businesses deserve better than being forced out of gainful employment by elected officials seeking to impose a patently unconstitutional law on an unpopular industry for the purposes of political gain.
I agree that it’s a silly tax. But it’s hardly going to force businesses to close. If you want to go to a strip club, you’re going to a strip club, $5 tax or no. Like most sin taxes, it is a revenue raiser, not a behavioral control.
Lawyers on both sides are getting warmed up. I’ll keep you posted.
(Hat tip: Craig McDaniel)
On March 28, a Texas court ruled that the government may not impose a $5/customer “pole tax” at strip clubs. The proceeds of the tax were to benefit victims of sexual assault and those who were uninsured in Texas (quite a combination, no?).
In Texas Entertainment Association Inc. v. Combs, Judge Scott Jenkins ruled that the tax violated the First Amendment and did not effectively advance a compelling government interest. Judge Jenkins found “[t]here is no evidence that combining alcohol with nude erotic dancing causes dancers to be uninsured, that any dancer is in fact uninsured, or that any uninsured dancer could qualify for assistance from the fund.”
So there you go. You may go to your strip clubs in Texas without fear of surcharge.
What does it mean otherwise? Likely nothing. The reality is that most sin taxes are enacted based on morality more than legality – just look at the crack tax and pimp tax. Proponents of such taxes have experienced mixed results and have adopted a more or less “you win some, you lose some” attitude. So, it’s clearly not the end of sin taxes. The works of Jenna Jameson and Dita von Teese both live to see another day.
