Monday, January 26, 2015

Tax Review Board rules against city imposition of "lap dance tax"

When it comes to lap dances, the Tax Review Board has a message for Mayor Nutter's administration: Hands off!

Tax Review Board rules against city imposition of "lap dance tax"

When it comes to lap dances, the Tax Review Board has a message for Mayor Nutter's administration: Hands off!

The five-member board, which is composed of mayoral appointees but voted against Nutter's Revenue Department, issued a unanimous ruling in favor of a group of strip club owners fighting the so-called "lap-dance tax." 

The issue was not actually a new tax but a new way of applying the city's amusement tax, which adds 5 percent to "admission charge." Earlier this year, city auditors billed strip joints Cheerleaders, Delilah's and Club Risque for back taxes, interest and penalties totaling $1.6 million - in part for not paying amusement taxes on the cost of lap dances. 

After six hearings that featured testimony from strippers, auditors and drama professors, the board ruled that the clubs did not have to pay for any back taxes and penalties related to the amusement tax. Board Chairwoman Nancy Kammerdeiner said that the Revenue Department applied the tax inconsistently and that its interpretation of the admission tax was too vague.

The owners' lawyers argued that the city had not billed the clubs for the amusement tax on lap dances in previous audits and that they already pay the amusement tax on cover charges.

They also argued that lap dances should qualify for an exception to the amusement tax for "contemporary American theater." Although it ruled in favor of the strip joints, the board did not take a stance on whether they were tantamount to playhouses.

In hearings, Deputy City Solicitor Marissa O'Connell argued that paying for a lap dance is the same thing as paying a new admission charge and should therefore be subject to a new tax. 

Asked whether the administration will appeal the decision, Nutter spokesman Mark McDonald said: "We will look at the decision from the Tax Review Board and then we will evaluate our options."

About this blog
William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
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Jenny DeHuff is a 2005 graduate of the University of Rhode Island, where she cut her teeth in journalism. A South Philly transplant from New England, she joined the Daily News City Hall Bureau in 2013. For the past several years, she has worked as an investigative reporter exposing corruption in suburban politics, covering sometimes ghastly criminal court cases and following the people’s money and how its spent. In addition to being a dogged news hound, she enjoys reading and writing about travel, animals, Irish whiskey and aviation. E-mail tips to dehuffj@phillynews.com
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David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
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