Sep 10, 2012

Make It Rain (Tax-Free): NY court to decide if lap dance is tax-exempt art



W. Andrew McCullough, an attorney for the Nite Moves strip club in Albany, told the New York Court of Appeals that admission fees and lap dances at the club should be freed of state sales taxes under an exemption that applies to "dramatic or musical arts performances."

He said that lap dancing is an art form and that, in any case, the state is not qualified to make such determinations, and that making such distinctions would be a violation of the constitutional right to freedom of expression.

A lawyer for the state rejected that analysis, and authorities are demanding about $400,000 in back taxes from the club.

A ruling is expected next month, with possible consequences for the estimated 150 to 200 adult nightclubs in the state.

During August 5th arguments from the club's lawyer, a skeptical Judge Eugene Pigott Jr. said the women are hired untrained and simply "do what they do."

"We need to get past the idea that somehow this is the Bolshoi," Pigott said.

McCullough acknowledged that, but added: "What we're saying is the state of New York doesn't get to be a dance critic."

He presented testimony from a cultural anthropologist who visited the club and concluded that the exotic dancing there qualifies as an art form.

Robert Goldfarb, an attorney for the state, said that nobody would visit the club if the dancers didn't remove their clothes. He also argued that the exemption applies to "choreographed" performances, and what the Nite Moves dancers do doesn't qualify.

At least three members of the seven-judge panel questioned the notion that a performance must be choreographed to be considered artistic. Chief Judge Jonathan Lippman suggested "creative artists in particular" often improvise.

Attorney Bradley Shafer filed a brief on behalf of the Hustler club in New York City in support of Nite Moves and said he has a similar case pending.

A private lap dance goes for $20 a minute (DAMN) at Nite Moves, a windowless building with a small stage and a pole.

"It's definitely a form of art," a dancer said at Nite Moves, where there was only one customer. She declined to give her name, saying she has another, unrelated job. "Some girls are up there practicing for hours when nobody's in here."

This should be an interesting case...stay tuned!

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