Strip Clubs: Entertainment Tax Unconstitutional

A group of strip club owners in Las Vegas say they have been unfairly penalized by Nevada’s 10 percent entertainment tax. They want a refund.

Taxman: Not a free-speech issue

A group of seven strip club owners in Las Vegas say Nevada’s live-entertainment tax is “a direct tax only on expression,” according to their attorney Bradley Shafer.

Arguing before the Nevada Supreme Court, lawyers said the tax is a violation of the First Amendment of the Constitution because it specifically targets adult entertainment.

Since 2003, strip clubs featuring nude and topless dancers have been required to pay the 10 percent tax. They now are seeking a refund from the Department of Taxation, according to the Associated Press.

Blake Doerr, senior deputy attorney general for the tax department, dismissed Shafer’s claim, saying the tax is levied not on the dancers, who are expressing themselves, but on the patrons, who pay to ogle the self-expression.

There is “no intent to stifle the message” and no violation of free speech rights, Doerr said. “The legislature did not look at any industry in an attempt to stop what they were doing.”

Even so, Justices Kristina Pickering and Michael Douglas questioned exemptions that have been made for “family-type” entertainment including NASCAR races, baseball games and some outdoor concerts like the Electric Daisy Carnival, which pay a 5 percent rate.

The entertainment tax brings in about $130 million a year.