Pole Dances Are Tax Exempt While Lap Dances Are Not
The tax man wants a cut of every pie, including the strip club pie.
For years, the Nite Moves strip club in Albany, New York fought in court with state tax officials over the issue of sales tax for admission fees to the strip club. Last Friday, an Administrative Law Judge ruled that pole dances are tax exempt as art performances, but lap dances are not.
The Legal Battle
Under New York law, earnings from live dramatic or musical arts performances in a theater are exempt from New York State and local sales tax. Nite Moves claims that its earnings from pole dances and lap dances are musical arts performances and should be exempt from sales tax under that law.
The New York State Department of Taxation and Finance argues that live exotic dance establishments don't qualify for the exemption.
Previous Rulings
This legal battle actually stretches all the way back to 2009. In 2009, judges found that both lap dances and pole dances were tax exempt.
However, the decision was appealed. In 2012, New York's highest court ruled that neither dances were tax exempt. The court majority ruled that the legislature's intent for the exemption was to "promote cultural and artistic performances in local communities." Apparently, exotic dances do not promote culture.
Go figure.
In a dissent of that decision, Judge Robert Smith argues that the law defines dramatic and musical art performance as "a live dramatic, choreographic or musical performance." According to Judge Smith, choreographic means dance, and Nite Move's women clearly dance.
The Latest Ruling
In this latest case, the Administrative Law Judge Joseph Pinto split the baby down the middle.
A tax auditor testified that he went to Nite Moves 10 to 15 times. While there, he developed an expert opinion that lap dances were not choreographed, but pole dances were. Relying on this expert testimony, the judge declared that Nite Moves must pay taxes on $3 million earned from lap dances but not on $2 million earned from pole dances.
Now all the pole dancers are going to call themselves artistes, and the lap dancers are going to get all jealous.
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Related Resources:
- Pole Dances Are Tax Exempt As An Art Form But Lap Dances Aren't, New York Tax Judge Rules (Huffington Post)
- Hustler Club's Lap Dances Too Sexy to Be Tax-Exempt: N.Y. Judge (FindLaw's Legally Weird)
- Stripper's Pole Dance Ruptured Man's Bladder at Bachelor Party (FindLaw's Legally Weird)
- $1M Seized During Traffic Stop Must Go Back to Stripper: Judge (FindLaw's Legally Weird)