HOUSTON — The Texas Supreme Court ruled Friday that the state’s “pole tax” — a $5-per-customer fee that strip clubs that serve alcohol are required to pay the state — did not violate the clubs’ free-speech rights, overturning a lower court decision that declared the fee unconstitutional.

In 2007, state legislators passed the Sexually Oriented Business Fee Act, which imposed the fee on nearly 200 establishments that feature live nude performances and allow the consumption of alcohol. The $5-per-customer entrance fee, which is imposed on the business and not the patron, is intended to raise money for sexual assault prevention programs and health insurance coverage for low-income people.

An Amarillo strip-club owner and the Texas Entertainment Association, which represents many of the state’s topless clubs, sued the state attorney general and comptroller over the fee. A district judge struck down the law in 2008, and an appeals court in 2009 ruled, in part, that the law was a “selective taxation scheme” that singled out nude dancing and a specific class of “First Amendment speakers.”

On Friday, the Supreme Court ruled unanimously that the fee was constitutional, declaring it a “minimal restriction” on the businesses and that any establishment seeking to avoid the fee “need only offer nude entertainment without allowing alcohol to be consumed,” Justice Nathan L. Hecht wrote for the court. He wrote that the fee was not intended to suppress expression in nude dancing, but was directed instead at “the secondary effects of nude dancing when alcohol is being consumed.”

Stewart Whitehead, a lawyer for the Texas Entertainment Association, said he and his client were considering whether to appeal to the United States Supreme Court or to have the state district court rule on the law’s constitutionality under the Texas Constitution. “We’re obviously disappointed and disagree with the ruling,” Mr. Whitehead said.

A spokesman for Greg Abbott, the state attorney general, called the ruling a victory for both the state and victims of sexual assault. “Thanks to today’s ruling, we are a step closer to freeing up millions of dollars for sexual assault prevention and crime victims’ assistance,” said the spokesman, Jerry Strickland.

Texas lawmakers had expected the fee to initially raise about $44 million, but because many strip clubs have refused to pay it while the case was in the courts, only about $15 million has been generated. The money “will continue to be held in an account pending the final outcome of the legal proceedings,” said a spokesman for Susan Combs, the comptroller.

Source- New York Times

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June 2021