Governments are doing anything they can to generate tax revenues. This is especially true as the United States Congress tries to keep from raising income taxes. Texas has it especially tough as there is no state personal income tax.
Texas has found a creative way to generate new taxes – through a pole tax on strip clubs that offer alcohol!
Pole Tax on Strip Clubs Serving Booze
The Texas Supreme Court ruled last Friday that the state’s “pole tax” — a $5-per-customer fee that strip clubs that serve alcohol are required to pay the state — did not violate the clubs’ free-speech rights, overturning a lower court decision that declared the fee unconstitutional.
In 2007, state legislators passed the Sexually Oriented Business Fee Act, which imposed the fee on nearly 200 establishments that feature live nude performances and allow the consumption of alcohol.
Pole Tax for Health Insurance
The $5-per-customer entrance fee, which is imposed on the business and not the patron, is intended to raise money for sexual assault prevention programs and health insurance coverage for low-income people.
One strip-club owner and the Texas Entertainment Association, which represents many of the state’s topless clubs, sued the state attorney general and comptroller over the fee. A district judge struck down the law in 2008, and an appeals court in 2009 ruled, in part, that the law was a “selective taxation scheme” that singled out nude dancing and a specific class of “First Amendment speakers.”
Booze Makes it Legal
On Friday, the Supreme Court ruled unanimously that the fee was constitutional, declaring it a “minimal restriction” on the businesses and that any establishment seeking to avoid the fee “need only offer nude entertainment without allowing alcohol to be consumed,” Justice Nathan L. Hecht wrote for the court. He wrote that the fee was not intended to suppress expression in nude dancing, but was directed instead at “the secondary effects of nude dancing when alcohol is being consumed.”
I am sure they will appeal this all the way to the US Supreme Court.