PHILADELPHIA, Pa.—The Tax Review Board has rebuffed efforts by Philadelphia to impose a separate tax on lap dances performed in the city’s strip clubs, whose owners challenged the bold city money grab after being assessed “back taxes, interest and penalties totaling $1.6 million—in part for not paying amusement taxes on the cost of lap dances,” reported Philly.com.
“The five-member board, which is composed of mayoral appointees but voted against [Mayor Michael] Nutter's Revenue Department, issued a unanimous ruling in favor of a group of strip club owners fighting the so-called ‘lap-dance tax,’” it continued.
The fight was over an “amusement tax" that clubs already collect at the door, but which the city decided in its most recent audit should also be collected separately (and retroactively) for lap dances.
“In hearings,” reported Philly.com, “Deputy City Solicitor Marissa O'Connell argued that paying for a lap dance is the same thing as paying a new admission charge and should therefore be subject to a new tax.”
But the clubs successfully countered that adding the new charge was double-dipping by the city, and also argued that lap dances should be exempt from the tax because they constitute "contemporary American theater,” a theory the court declined to embrace.
In the end, “Board Chairwoman Nancy Kammerdeiner said that the Revenue Department applied the tax inconsistently and that its interpretation of the admission tax was too vague.”
The city is now deciding whether or not to appeal the ruling, said an assistant to the mayor.