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Texas House OKs strip club admission fee tax

AUSTIN – []- A $5-per-person gentlemen’s club fee would be repealed and replaced with a tax on club admissions charges, under a measure that easily passed the House on Thursday.

Rep. Senfronia Thompson’s [pictured] bill, endorsed by the adult entertainment industry, would eliminate the per-person strip club fee that has been tied up in the courts since last legislative session, and allow the state to start spending the millions of dollars collected so far for sexual assault programs. Under her bill, the state would instead collect a 10 percent tax on admissions fees charged by all sexually oriented businesses.

It’s a measure supported by club operators, who have argued the per-person fee unfairly targets certain sexually oriented businesses, and is excessive in a tough economic time. They contributed a combined $5,000 to Thompson’s campaign in the month before her last election, a sixth of her contributions in that reporting period.

“What’s wrong, ladies and gentlemen, with ending this lawsuit? What’s wrong with taxing them 10 percent of the gross receipts?” asked Thompson, D-Houston. “Put that on your literature for your reelection campaign.”

But critics say the bill would raise just a fraction of the per-person fee. The reason the clubs support Thompson’s bill, they say, is because it lets them determine their own cover charges, or get around the tax by not charging one at all. And it lets clubs that have already paid the $5 per-person fee use that money as a credit toward the new tax.

Rep. Ellen Cohen designed last session’s strip club fee, which is currently being collected to fund sexual assault services and low-income health care, but not being spent because of the lawsuit. Attorneys for the adult entertainment industry have argued the measure violates First Amendment rights to free expression, and unfairly links gentlemen’s clubs with social problems. A district court agreed, and the state has appealed that decision.

Cohen has dozens of co-authors on her own replacement bill, which she says would address the courts’ concerns by reducing the per-person charge to $3 and making sexual assault prevention programs the sole beneficiaries. Cohen, whose bill is in committee and has not yet come up for a House vote, said Thursday she would vote for Thompson’s bill – as a supplement to hers and not a replacement. A recent University of Texas study estimated Cohen’s $3 fee would raise between $16 million and $18 million annually, while Thompson’s 10 percent admissions tax would raise between $500,000 and $1.2 million. Thompson says that number is low, and that her bill would raise between $4 million and $6 million annually.

“What we need to do is make sure whatever we’re doing raises the most amount of money for the greatest amount of good,” Cohen said.


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