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Tax board to city: Hands off lap dances

The Tax Review Board ruled against the Nutter administration so-called “lap dance tax.”

Lap dances are tax-free in the City of Brotherly Love. (AP Photo/Charlie Riedel)
Lap dances are tax-free in the City of Brotherly Love. (AP Photo/Charlie Riedel)Read moreAP

WHEN IT COMES to lap dances, the Tax Review Board has a message for Mayor Nutter's administration: Hands off!

The five-member board yesterday revealed its unanimous ruling in favor of a group of strip-club owners fighting the so-called lap-dance tax.

The issue was not a new tax, but a new way of applying the city amusement tax, which adds 5 percent to admission charges. Earlier this year, the city billed Cheerleaders, Delilah's and Club Risque more than $1 million in back taxes, interest and penalties - in part for not paying amusement taxes on the cost of lap dances.

After six hearings that featured testimony from strippers, auditors and academics, the board ruled that the clubs did not have to pay for any back taxes and penalties related to their hated pole tax.

Board Chairwoman Nancy Kammerdeiner said the Revenue Department's interpretation of the tax was too broad.

The owners' lawyers had also argued that lap dances should qualify for an exception to the amusement tax for "contemporary American theater," but the board didn't rule on that issue.

Attorney George Bochetto, who represented two of the clubs and demonstrated a penchant for the theatrical himself, said this wasn't just a win for the strip clubs, but for entertainment venues across the city - and for the economy and democracy.

"This is really a victory for every commercial establishment in Philadelphia that has a door charge that conducts any kind of interior activity: piano bars, pool halls, karaoke," he said. "This ruling of not taxing or overtaxing actually helps the economy."

The board's action, he said, is "a great example of the way in which our government works, and that is when one branch takes action, another branch or another agency gets to check it."

And why did the strip clubs prevail here when similar cases in other states have failed?

"George Bochetto," Bochetto said.

In hearings, Deputy City Solicitor Marissa O'Connell argued that paying for a lap dance is the same thing as paying a new admission charge and should therefore be subject to the tax. She declined to comment yesterday.

Asked whether the administration will appeal the decision, Nutter spokesman Mark McDonald said: "We will look at the decision from the Tax Review Board, and then we will evaluate our options."