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Analysis: California's New Porn Tax Bill

It's virtually identical to previous bills — and just as unconstitutional

Analysis: California's New Porn Tax Bill

SACRAMENTO – The first thing one notices in looking at California Assembly Bill 847, this year's porn tax bill, is that Asm. Charles Calderon seems to have been replaced as the bill's introducer – his name appears in two places with a line through it – and Asm. Mary Salas' name substituted. Could it be because every porn tax bill Calderon has introduced – and there have been several, stretching back over a dozen years – has been defeated?

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The bill, which was introduced this morning, begins with a number of legislative "findings," including that "Adult entertainment venues adversely impact the character of local neighborhoods by, among other things, reducing local property values, curtailing development, and engendering many types of criminal activities," and that they "endanger the health, safety, and welfare of citizens in their vicinity."

And how does the legislature know this? Easy; they looked at the "comprehensive study of adult entertainment venues" that the city of Los Angeles prepared 32 years ago, which claimed that adult venues are "associated with higher rates of prostitution, robbery, assault and theft in surrounding communities." (Such studies, particularly the L.A. one, have long since been debunked in a meta-study prepared by sociologist Dr. Dan Linz.)

But despite the fact that these "negative secondary effects" supposedly "drain public resources" and "place a significant strain on the courts" – actually, no adult retailers have been busted in the state for at least a decade, and the two producers that have been prosecuted in the state since 1990 each wound up pleading to "creating a public nuisance" and paying a small fine – the proposed taxes "are not intended as a prohibition of legally protected forms of expression."

And they'd better not be:

"[A] city may not regulate the secondary effects of speech by suppressing the speech itself," wrote Supreme Court Justice Anthony Kennedy in his controlling concurrence in City of Los Angeles v. Alameda Books. "A city may not, for example, impose a content-based fee or tax. This is true even if the government purports to justify the fee by reference to secondary effects. Though the inference may be inexorable that a city could reduce secondary effects by reducing speech, this is not a permissible strategy. The purpose and effect of a zoning ordinance must be to reduce secondary effects and not to reduce speech." [Citations omitted.]

But no; Salas justifies this content-based tax by claiming that it is "intended to represent a balancing of competing interests. Specifically, these taxes are designed to balance the need to combat the negative secondary effects of adult entertainment venues against the legally protected rights of adult entertainment providers."

But with no evidence of the so-called "negative secondary effects" beyond the debunked 1977 study, it seems unlikely that the tax could survive a court challenge.

That clear unconstitutionality aside, the new tax, pegged at 20% of the gross receipts of retail sales, would go into an "adult entertainment impact fund" – the same fund proposed by Calderon in his 2008 AB 2914 – which would be used to "ameliorate the secondary effects of adult entertainment venues." And in case no one knows what form that amelioration would take, the bill spells it out: Increased funding for state and local law enforcement to combat "criminal activity in the vicinity" of adult venues such as drug sales, prostitution and "crimes against women"; "programs to address the negative secondary effects of adult entertainment venues on property values" (even though there is no recorded instance of a property value decreasing in the vicinity of an adult venue); and funding for the testing and treatment of sexually transmitted diseases, for "mental health treatment"(!) and for substance abuse programs – none of which have any direct relationship to either selling/renting adult videos or nude dancing.

Also of interest is the pretzel logic used to determine which venues will be taxed and which won't. For instance, while just about every video store rents and sells sexually explicit movies, the new tax would only affect those retailers for whom "adult material" accounts for more than 50% of the store's gross receipts – but if the store has video arcade booths, all bets are off: The tax applies automatically. Also to be taxed are venues that provide "live sexually explicit conduct," which is defined as either "sexual intercourse," "masturbation" – attention, adult movie studios and location sets – "sadistic or masochistic abuse" – attention, dungeon-masters – or "lascivious exhibition of the genitals or pubic area" – attention, strip clubs.

What won't be taxed, though, are venues "whose primary purpose is the provision of live performances that may include the display of complete nudity, so long as the live performance is a legitimate play, opera, ballet, or concert at a concert house, playhouse or theater, museum, or educational institution or facility" that derives less than 20% of its gross receipts from the sale of alcoholic beverages." [Emphasis added]

So, for instance, if producer David Bertolino were to bring his play, "The Deep Throat Sex Scandal," some of whose performers will reportedly include stars of XXX movies, to California, its gross receipts would not be taxed, even though its subject matter is, at least in part, about one of the very movies sold in adult video stores that would be taxed!

Also, let's examine the term "adult material" which would trigger the tax. It is defined, in part, as "harmful matter[] as defined in Section 313 of the Penal Code." But Sec. 313 defines "harmful matter" as "matter, taken as a whole, which to the average person, applying contemporary statewide standards, appeals to the prurient interest, and is matter which, taken as a whole, depicts or describes in a patently offensive way sexual conduct and which, taken as a whole, lacks serious literary, artistic, political, or scientific value for minors." [Emphasis added]

In other words, sexually oriented material being sold by adults to adults in California would, under this law, be subject to a (content-based) tax because it may "appeal to the prurient interest" of minors, may "depict or describe in a patently offensive way sexual conduct" for minors, and may "lack[] serious literary, artistic, political, or scientific value for minors" — none of whom are even supposed to see the material!

Attention, Blockbuster Video: Better clear your shelves of such classics as Pretty Baby, Blue Lagoon, Midnight Cowboy, Titanic, Boogie Nights, Monster's Ball, Brokeback Mountain and dozens of other Hollywood hits, or face a 20% tax on your gross receipts from all your video sales and rentals, even though you rent no "adult" movies.

Bottom Line: AB 847 is another clearly unconstitutional attempt to levy a content-based tax on adult businesses, to be used for purposes unconnected to adult materials, and to be administered by a "fund" yet to be created, which would likely eat up in administrative and enforcement costs most if not all of the predicted revenues from the tax.

Fortunately, Free Speech Coalition is already on the case, and will be sending representatives to next month's hearing on the bill.






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Mark Kernes

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