Wednesday, April 13, 2005
Copyright © Las Vegas Review-Journal

Tax for strip clubs draws challenge

ACLU says plan unconstitutional

CARSON CITY -- An American Civil Liberties Union lawyer charged Tuesday that a bill by Senate Minority Leader Dina Titus to impose a 10 percent tax on strip club entertainment is unconstitutional and will be struck down by the courts.

"This bill is way off base from a constitutional standpoint," ACLU of Nevada general counsel Allen Lichtenstein told the Senate Taxation Committee.

He said the courts have determined that strip dancing is constitutionally protected free expression. While strip clubs can be required to pay a general tax like other businesses, he said, they cannot be singled out for a special tax just because people do not like them.

Titus devised Senate Bill 247, which would change the live entertainment tax law passed by the Legislature two years ago. Under her bill, a 10 percent live entertainment tax would be assessed on adult entertainment offered in strip clubs and brothels.

"I don't know why the constitution should be a problem," said Titus, D-Las Vegas.

Live entertainment taxes would continue to be charged on entertainment offered in casinos, but not on sporting events, circuses and entertainment offered in bars, taverns, restaurants and nightclubs.

"This will help us get a second NASCAR race and help us get a (Major League) professional baseball team," Titus said. "These facilities (strip clubs) don't provide workman's compensation or other benefits. Any loss in revenue would be made up from the increase from adult entertainment."

She said that the tax has been imposed for many years on live entertainment in casinos and that she wants to levy the same tax on strip clubs.

Live entertainment taxes in noncasino businesses were projected to bring in $75 million but have brought in $6 million a year.

Nevada Brothel Association lobbyist George Flint said his industry thought it was subject to the entertainment tax two years ago but escaped taxation when a late amendment freed businesses with fewer than 300 seats from the tax.

Earlier this year, state Taxation Director Chuck Chinnock said his agents have checked the strip clubs and determined those that are required to pay have been paying the live entertainment tax. About 62 percent of the revenue from the noncasino live entertainment tax comes from the strip clubs, he said.

Chinnock has found the 300-seat exemption is the main reason why the state reaps so little revenue from strip clubs. Titus' bill would remove the 300-seat exemption.