Texas Court Shimmies Around Pole Tax

A district court in Texas ruled today that the State's $5 fee imposed on patrons entering a strip club is an impermissable impediment to the free speech guarantees of the United States Constitution.

The tax, referred to vernacularly as the "pole tax", went into effect in January of this year and, according to the report, most of the proceeds were used in a fund set up to assist rape victims. Ellen Cohen, a sponsor of the legislation, then said “This is an industry that largely employs women, and this gives them an opportunity to raise funds for a crime that affects women." Budget estimates reflected that the anticipated revenue effect of the legislation was $40 million dollars, based upon estimates that 8 million people go to Texas strip clubs annually.  

The Texas court specifically determined that the State failed to meet its burden of demonstrating that the tax is necessary to serve a compelling state interest and is narrowly written to achieve that purpose. The court then concluded that no evidence was submitted to show that the amount of the tax was in any way related to the degree to which the taxed business activity contributes to the secondary effects or to the financial cost of that contribution to the secondary affects of the activity.

 As much as I am opposed to "sin tax" legislation, this one was right on the mark. It is hard to believe that Texas, was pioneering a tax that actually potentially benefitted society.  Now, of course, in the face of a Constitutional challenge, and probably a great deal of pressure from strip club owners, this Texas court determined that the tax was not legally imposed.

John M. Hanamirian