A strip club in upstate New York goes to the Court of Appeals today to argue that its nude lap dancers are practicing an art form and should be exempt from state taxes.
The state tax department is demanding that the Nite Moves club in Albany pays $124,000 that it claims are owed in back taxes.
Tax officials say that while sales taxes were paid on the club’s non-alcoholic drinks, they are also owed on admission and so-called “couch sales,” where patrons pay for private or lap dances.
Nite Moves claims the dances are exempt under state tax law as “live dramatic or musical arts performances”, an exemption typically applies to theater or ballet.
The club is relying on testimony from a cultural anthropologist who has studied exotic dance and visited Nite Moves.
W. Andrew McCullough, an attorney for Nite Moves, said the impact of the eventual court ruling probably won’t be widespread because most establishments featuring exotic dancers sell alcohol where other tax rules apply.
An administrative law judge previously agreed with Nite Moves, saying that “the fact that the dancers remove all or part of their costume …simply does not render such dance routines as something less than choreographed performances.”
But the state Tax Appeals Tribunal said the club didn’t present sufficient proof that it qualifies for the exemption, and a mid-level court upheld the tribunal ruling last year.
Albany hotspot: Nite Moves claims nude lap dancing at the club should be exempt from taxes.
“In our view, there can be no serious question that – at a bare minimum – the petitioner failed to meet its burden of establishing that the private dances offered at its club were choreographed performances,” the Appellate Division court ruled. The four justices also found “no merit” to the club’s constitutional claims.
The appellate court also noted that the club dancers are not required to have any formal dance training and that the anthropologist didn’t see any of the dances done in private rooms.
Cary Zeitner, a spokesman for the state Department of Taxation and Finance, said the agency is not aware of any other cases in state court similar to the Nite Moves case.
The New York State Court of Appeals is expected to come to a decision later this month.
