PHILADELPHIA, Pa.—Two Philadelphia strip clubs are appealing huge taxes levied against them by the city based on a so-called amusement tax that usually is applied to admission fees but in this case was applied by the city to lap dance revenue. The taxes are not slight— Club Risque was charged $320,538, and Cheerleaders was charged $486,482.
According to ABC News, “The attorney for Club Risque and Cheerleaders said the city is taking an existing ordinance, the 5 percent amusement tax ordinance which typically applies to admissions fees, and is trying to turn it into a tax for lap dances.”
Mark McDonald, a spokesperson for Philadelphia Mayor Nutter, responded, "There is no such lap dance tax. There is an amusement tax and the city is engaged in an enforcement action involving several businesses and about which I am unable to comment because we don't discuss pending litigation.”
The club attorney, George Bochetto, called foul, accusing the city of auditing lap dance revenue and then going back five years and tacking on fines. "It's over the top. Unbelievable,“ he told Philly.com.
According to the site, “The clubs, of course, pay business taxes in addition to the amusement tax, and dancers are supposed to pay income and wage taxes. An informed City Hall source says the city feels it can run an amusement tax up the pole because the lap dance is a separate experience.”
Bochetto says that’s double-dipping, and pointed to the language from the Philadelphia Code about the amusement tax to back up his claim: "Imposed upon the admission fee or privilege to attend or engage in any amusement."
McDonald issued an implied accusation of his own, saying tax avoidance is a "continuous issue faced by any revenue department. Without speaking directly to a case about which I'm not going to comment, I can say that a business might start providing a new service or in an existing service in a new way that was not there before. When a revenue department finds out about it, an action to collect appropriate taxes would ensue."
Philly.com added its own postscript to the story, musing, “Maybe the city can try for an emission fee.”
Photo: Philadelphia City Hall