Texas upholds strip club tax

The Texas Supreme Court has unanimously ruled that the state can continue to charge a $5-per-patron tax on strip clubs that serve alcohol.

Four years ago, Texas introduced the so-called “pole tax,” and strip club owners immediately challenged it in court. The Players nightclub in Amarillo and the Texas Entertainment Association, an exotic dancing trade group, sued the state for violating their First Amendment right to freedom of expression.

According to CNN:

(Players nightclub owner Chandra) Brown had testified the fee unfairly and directly targeted her dancers, and that the added cost of the fee would drive away customers, who must also pay a $4 cover charge.

The state justices disagreed, noting that, “the $5 fee is a minimal restriction on the businesses, so small that (the clubs) argue it is ineffective.”

"The fee in this case is clearly directed not at expression in nude dancing but at the secondary effects of nude dancing when alcohol is being consumed," Justice Nathan Hecht wrote in the decision. "An adult entertainment business can avoid the fee altogether simply by not allowing alcohol to be consumed."

The law was expected to generate $40 million a year in fees, the Texas Tribune reports, but many strip club owners stopped paying the fee while the courts heard the case. The 65 of the state’s 176 strip clubs that haven’t paid up can expect the Texas comptroller’s office to send them a bill for the fee, plus interest, shortly, a government official told the newspaper.

According to CNN:

The state said most of the money from the patron fee would go to help sexual assault victims and provide health benefits for low-income residents. Distribution of that money had been held up pending resolution of the case.

In upholding the fee, the Texas Supreme Court overturned two lower court decisions, the San Antonio Express-News reports. Strip club owners are now deciding whether to take their case to the U.S. Supreme Court next, an attorney for the Texas Entertainment Association said.