Appeals court strikes down strip club tax

By Chris Rizo | Jun 6, 2009

Diane Henson

Greg Abbott (R)

AUSTIN (Legal Newsline)- A state law imposing an admission tax on strip club patrons has been declared unconstitutional by a panel of state appeals court justices.

A panel of 3rd Court of Appeals judges ruled Friday that the $5 per-patron fee passed by state legislators in 2007 runs roughshod over the First Amendment.

In a 2-1 opinion, the judges said lawmakers were wrong to raise sexual-assault prevention funds on the backs of strip club patrons. The court rejected the state's argument that the fee was an alcohol regulation levy.

"While nude dancing 'falls only within the outer ambit of the First Amendment's protection,' it is nevertheless protected as expressive conduct," Justice Diane Henson wrote for the majority.

In a dissent, Justice David Puryear said the fee should stand because it takes aim at the link between alcohol, erotic expression and sexual assault.

"The statute seems concerned with the regulation of alcohol or the regulation of alcohol and erotic entertainment rather than the suppression of any specific erotic expression," he wrote.

The lawsuit was brought in 2007 by the Texas Entertainment Association Inc. and Karpod Inc., which owns the Amarillo club.

So far, the so-called pole tax has raised $12.7 million. The revenue remains unspent in a bank account.

Should state Attorney General Greg Abbott, a Republican, decide to appeal the case to the state Supreme Court, the tax would continue to be levied and deposited in trust. If no appeal is brought forth or if the state loses at the Supreme Court, the money will be returned to strip club owners.

At trial, Travis County District Judge Scott Jenkins ruled that the pole tax is unconstitutional because the fee infringed on First Amendment protected expression.

In his ruling, the ruled that the pole tax didn't pass constitutional muster because, among other things, there was no nexus between what the fee was bankrolling and strip clubs.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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