Taxman Strips Exotic Dancers' Write-Down
In what will likely cause riots on the streets of New York City, the Court of Appeals has upheld that strip clubs could not longer claim a tax exemption as its stage and couch dances did not merit a 'musical arts performance' exemption. As Bloomberg BusinessWeek reports: "It is not irrational for the tax tribunal to decline to extend a tax exemption to every act that declares itself a ‘dance performance,’" the Court of Appeals said in a 4-3 decision. The sticking point, apparently, was the fact that the 'private dances' were the same as those supposedly 'choreographed' on stage (which doesn't seem such a bad thing to us?) but like the Tax Tribunal we haven't observed them or have personal knowledge of such VIP-room activity entertainment. The majority said qualifying the dances as artistic performances would “allow the exemption to swallow the general tax" and one judge added "I find this particular form of dance unedifying -- indeed, I am stuffy enough to find it distasteful; perhaps, for similar reasons I do not read Hustler magazine; I would rather read the New Yorker," noting that the former was insufficiently 'cultural and artistic'."
Indeed, a club presenting performances by women gyrating on a pole to music, however athletic or artistic, seems quite irrational; oh wait.
Seems quite highbrow, athletic, and artistic to us?
A New York strip club can’t claim a tax exemption on entrance and performance fees on the grounds that it presents “musical arts performances,” the state’s highest court ruled.
The New York Court of Appeals in Albany today upheld a lower court’s ruling that Nite Moves, an adult “juice bar” in Latham, New York, didn’t prove to tax authorities that its stage and couch dances merited the exemption granted to artistic performances.
“It is not irrational for the tax tribunal to decline to extend a tax exemption to every act that declares itself a ‘dance performance,’” the Court of Appeals said in a 4-3 decision.
While the state imposes a sales tax on any admission charge greater than 10 cents for the use of a “place of amusement,” the Legislature created an exemption for “dramatic or musical arts performances,” according to the ruling.
Nite Moves, which calls itself an “upscale non-alcoholic juice bar,” argued its performances entitled the adult- entertainment business to the exemption, according to the ruling.
The club, which was required to show that its fees were admission charges for choreographed dance routines, failed to prove that performances on either the main stage or in private rooms qualified for the tax break, the Court of Appeals said.
The state’s Tax Appeal Tribunal discredited an expert presented by the club who said the performances were choreographed, finding that her testimony was compromised by her opinion that private dances were the same as those on the main stage although she didn’t observe them or have personal knowledge, according to the ruling.
The tribunal is a panel of three commissioners appointed by the governor that heads the state’s Division of Tax Appeals, created by the legislature in 1986 to resolve tax and licensing disputes, according to its website.
Court of Appeals Judge Robert S. Smith disagreed with the majority, saying the tribunal’s ruling “makes a distinction between highbrow dance and lowbrow dance that is not to be found in the governing statute and raises significant constitutional problems.”
“Like the majority and the tribunal, I find this particular form of dance unedifying -- indeed, I am stuffy enough to find it distasteful,” Smith wrote in his dissent. “Perhaps, for similar reasons I do not read Hustler magazine; I would rather read the New Yorker. I would be appalled, however, if the state were to exact from Hustler a tax that the New Yorker did not have to pay, on the ground that what appears in Hustler is insufficiently ‘cultural and artistic.’”
The majority said qualifying the dances as artistic performances would “allow the exemption to swallow the general tax” since other forms of entertainment not specified by the Legislature would ask to be spared from the levy.