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Philadelphia loses effort to collect $1.5 million from strip clubs

Patrons of Club Risqué, Cheerleaders and Delilah's or any other adults-only clubs in Philadelphia won't have to pay added taxes for semi-private dances performed at the entertainment spots.

Vintage gentlemens club sign courtesy Biker Crossroads; Philadelphia lap dance tax fails

That's the word from Pennsylvania Common Pleas Court Judge Ellen Ceisler, who ruled last week that the City of Brotherly Love could not extend a 5 percent amusement tax to the dances. With dances reportedly costing between $20 and $30, patrons would owe another $1 to $1.50 per dance.

Ceisler's ruling upheld an earlier decision by the city's Tax Review Board.

Last October, the tax panel said that Philadelphia's amusement tax law is so vague that it can only be reasonably applied to a club's cover charge, which it already does, but not to other activities on the premises.

Back taxes also nixed: The ruling also ended, for now, Philadelphia effort to collect around $1.5 million in back taxes, interest and penalties for back-room dances performed at the three clubs in question from 2008 to 2010.

The breakdown was around $900,000 for Club Risqué and Cheerleaders and $630,000 for Delilah's. Philly officials assessed the amount after audits by city tax agents.

Unfortunately for Philly, it won't get those back taxes. But the $1.5 million attempt does get this week's By the Numbers honor.

"It's plain that the amusement tax is crafted in a way to apply to door charges, admissions fees, cover charges. It is not intended to cover interior entertainment issues," said attorney George Bochetto, who represented Cheerleaders and Club Risqué.

"If the city wants to tax lap dances, they can go to City Council, ask City Council to amend the ordinance, and they can start imposing a tax on lap dances. Or anything else they want: karaoke songs, piano playing. Anything they want," added Bochetto. "But you have to put it in the ordinance. You just can't make it up as you go along."

Other jurisdictions, other strip club taxes: The revenue raising possibilities of scantily-clad women certainly is popular across the country.

And other states have had more success in assessing taxes on similar adult-entertainment operations.

Last year, Nite Moves in upstate New York lost its court battle to avoid collecting sales taxes on its admission charges. The gentlemen's club had argued it should get the same tax exemption afforded Empire State musical arts performances.

In 2011, Texas strip clubs lost their legal efforts to quash the state's "pole tax." For years, the Lone Star State has been a $5-per-customer levy, with most of the proceeds going to programs to help rape victims.

And as long as there are so-called gentlemen's clubs and tax collectors, which will likely be forever, there will be fights over legal and appropriate taxes on such operations.

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