The lap-dance tax
You didn't know there was a hootchy-kootchy fee? Neither did the gentlemen's clubs.
"Don't tax you, don't tax me, tax that fellow behind the tree!"
- Sen. Russell B. Long
LET'S GIVE CITY HALL credit for ingenuity. After failing to drive up taxes on soda and smokes, the creative geniuses slipped a hootchy-kootchy tax under the radar.
The form of interpersonal social contact known as the lap dance is subject to the city's 5 percent amusement tax. Who knew? Not the "gentlemen's clubs," apparently.
To some, the tax is a stroke of genius, but it's rubbing the clubs the wrong way.
To lawyer George Bochetto, it is "financial desperation" and the city trying to tax the same thing twice.
Bochetto represents Club Risque and Cheerleaders, two of the clubs squirming under a new tax burden.
According to appeal petitions, Cheerleaders owes $486,482 and Club Risque owes $320,538. The city audited the lap-dance encounters, "then issued an assessment going back five years," plus interest and penalties, Bochetto says, stripping away the verbiage. "It's over the top. Unbelievable."
To learn the city's position, I called Mark McDonald, the mayor's spokesman, who says (drumroll): "We do not comment on pending litigation."
I quibble, arguing that it's not (yet) in litigation, that the clubs will make their case before the Tax Review Board. "That is an adversarial administration process," says McDonald, getting the last word.
Actually, the last word may come at the July 23 meeting of the board, the decision of which can be appealed to Common Pleas Court.
Before I give Bochetto more of the floor, here are some tasty backstage morsels:
Owning a gentlemen's club is the best deal in the world.
You don't pay the dancers. Usually, they pay you for the privilege of working in a safe, upscale environment.
Who pays the dancers? The "gentlemen" who will buy drinks or pass cash to attractive, sexy women to keep them company, listen to their troubles, or laugh at their jokes. It's cheaper than a shrink.
The dancers' earnings come from lap dances, which is an art form consisting of sitting on a guy's lap and grinding. In the "champagne room," the male (or female) guest may get to recline on a sofa and have the dancer rub her body against the customer's, usually for the length of one song being piped in. The general rule is that customers have to keep their mitts off the dancers, but some of the ladies might be a little lenient. Or so I hear, having no firsthand experience (worth mentioning).
What I didn't know before reading the petitions was that the "girls" kick back a percentage of their lap-dance fee to the club. On the other hand, dancers get a slice of whatever drinks they get guys to buy when they are keeping company.
The clubs, of course, pay business taxes in addition to the amusement tax, and dancers are supposed to pay income and wage taxes.
An informed City Hall source says the city feels it can run an amusement tax up the pole because the lap dance is a separate experience.
Bochetto vehemently disagrees, with a variety of arguments from mathematical to constitutional.
He makes a good argument when he says that the city is taxing the same thing twice: The customer comes in to interact with the dancers, and that's what a lap dance is - interaction (with an emphasis on the action).
His best argument is this language from the Philadelphia Code about the amusement tax: "Imposed upon the admission fee or privilege to attend or engage in any amusement."
The key words are "admission fee," I think, and the $20 the customer hands the dancer is not an "admission fee."
Maybe the city can try for an emission fee.
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