Strip Club Liable for $125k Sales Tax; Lap Dances Are Not Tax-Exempt as 'Musical Performances' or 'Theater-in-the-Round'

Albany Times-Union, Court: Lap Dances Aren't Tax-Exempt:

While a lap dance might prompt a strong reaction from an audience, it doesn't rise to the level of art -- at least according to a state appellate court.

Thursday's ruling said entertainers at a local strip club are subject to sales taxes, and their expressions are not considered choreographed artistic performances that would be exempt.

Nite Moves, an adult "juice bar" on Route 9 in Latham, has been fighting the tax law -- first in an administrative hearing and then in court -- following a 2005 audit by the state Division of Taxation that concluded the club owed nearly $125,000 in sales tax, plus interest for door admission charges and private dance sales. The Appellate Division of state Supreme Court upheld that decision in an unanimous opinion.

Patrons at Nite Moves "view exotic dances performed by women in various stages of undress," the decision said. Revenue is generated from admission charges, "couch sales" -- the fee charged when a dancer performs for a customer in one of the club's private rooms -- as well as register sales from the non-alcoholic beverages sold and house fees paid by the dancers to the club.

• Daily Mail, 'Stripping Is NOT Art': NY Ruling Means Lap Dancing Is a Taxable Service
• NY Daily News, Lap Dance Tax? Court Says Erotic Dances Are Not Art, Subject to Sales Tax
• NY Post, Taxman in $lap Dance: Hand in Clubs' Pockets
• Reuters, NY Court Rules Private Lap Dances Not Tax Exempt
• Wall Street Journal, NY Court Says Juice Bar's Lap Dances are Taxable
• Washington Post, NY Court: Strip Club Has to Pay Taxes on Lap Dances Because They’re Not Artistic Performances

(Hat Tip: Bob Kamman.)