Texas Can Tax Twerking Contests, And Other Pole Tax News
This weekend, the 3rd Circuit Court of Appeals upheld the Texas pole tax against an appeal that charged the tax was an improperly utilized “occupation tax.” Officially known as the Sexually Oriented Business Fee, the tax requires strip clubs to pay $5 per patron to a fund for victims of sexual assault. While similar taxes have been passed in other states, Texas was the first to pass one in 2007, though it’s been continuously challenged in court.
Just last week, Comptroller Susan Combs said she’d start aggressively pursuing clubs that weren’t paying the tax, although she did not mention whether she would be going after the other businesses it targets. The tax is supposed to be collected from the door of any premise hosting adult entertainment.
From the Texas Administrative Code:
(3) A business that holds occasional events described in subsection (a)(3) of this section, but does not habitually engage in the activity described in subsection (a)(3) of this section is liable for the sexually oriented business fee for those occasional events. For example, a nightclub that hosts a wet t-shirt contest is liable for the fee based upon attendance during the event.
The bar manager at the Palm Street Pier on South Padre Island said that while they’ve had wet T-shirt contests in previous years, they didn’t have one in 2014 because “no one showed up.” She said that they have never been asked to pay the SOB fee on previous years’ contests. I’m waiting on a reply from Austin club ND as to whether they were asked to pay it for nights they held “Twerk For A Stack” contests. One club that isn’t a strip club, Tony’s Corner Pocket in Houston, appears on the comptroller’s rolls as having paid each year the tax is in effect. They have occasional amateur strip contests and it appears that this is what they’re paying on, making them the most scrupulous bar in the state, since no other non-strip club appears in the payment records.