Thursday, June 16, 2011

NY Judge Fails to Recognize Lap Dance as Art

Earlier this month, a New York court ruled that entertainers at strip clubs are subject to sales tax, and their performances are not considered choreographed artistic performance eligible for tax exemption. In 2005, “Nite Moves,” an adult establishment in Latham, New York, was audited by the state Division of Taxation and assessed close to $125,000 in sales tax and interest. The club argued that its performances constituted art, and therefore fell within an exception found in the state’s tax code and were not subject to the tax. The state’s assessment was upheld in a unanimous decision by the court.

The nine-page ruling cited numerous elements of tax case law and went into extreme detail defining dramatic or musical arts, choreography, and analyzed whether Nite Moves qualified as a “place of amusement.” At the hearing, the club presented testimony from a cultural anthropologist, who researched exotic dance, visited the club and viewed DVDs of the dancers’ performances. She stated that the shows at Nite Moves, and the lap dances performed in private rooms, were “unequivocally live dramatic choreographic performances.”

The court disagreed. It found that dancers were not required to have formal training, instead relying on videos or tips from other dancers to learn their moves. It ruled that the dances offered at the club did not constitute “’live dramatic or musical arts performances’ within the meaning of the statute.”

So if you are heading up to New York for some adult entertainment, remember to bring some extra George Washingtons to pay your sales tax.

Money Matters: LWC on the Radio!

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