As the 81st session winds down, legislators are reconsidering the strip club fee (also referred to as the “pole tax”), which taxes strip clubs to create revenue for underfunded sexual assault centers. Two Democratic representatives from Houston, Ellen Cohen and Senfronia Thompson, offered competing bills, and both club owners and sexual assault advocates such as the Texas Association Against Sexual Assault (TAASA) have spoken out. Sexually oriented businesses include any establishments where live nude dancing is permitted and alcohol is served.
In 2007, Rep. Cohen sponsored legislation that would have imposed a $5 dollar fee on strip club patrons at the door. After the comptroller estimated that such a tax would generate $87 million—more money than Cohen felt could responsibly spend on sexual assault—part of the funds were set aside for indigent healthcare. In a lawsuit brought by the Texas Entertainment Association, representing the state’s strip club industry, the tax was declared unconstitutional, partly on the grounds that there was no connection between strip clubs and indigent health care. This session, Cohen devised a bill that lowers the entrance fee to three dollars and assigns all the money to sexual assault programs.
Last week, however, Cohen’s bill was essentially killed by a legislative point of order. Although Rep. Thompson is disappointed that Cohen’s bill did not get a chance to pass the House, she remains hopeful that there can be some kind of compromise. Thompson worked extensively with the strip club industry on her bill, which proposes a 10 percent tax on businesses that already have a door fee while expanding the tax to all adult book stores, adult video stores, and movie theaters.
Critics claim that clubs can easily evade this tax by abolishing their door fees. “I don’t know about you, but I haven’t been in a bookstore, adult or otherwise that had a door fee,” says Torie Camp, deputy director for TAASA. “And I haven’t come across many businesses that if they could avoid a tax that they wouldn’t avoid [it], so what is to stop a strip club that oftentimes has a door fee from instituting a drink minimum and thereby circumventing that tax one hundred percent?”
Angelina Spencer, executive director of the National Association of Club Executives, finds the charge that clubs would abolish their entry fees to avoid the tax illogical. To make up for lost revenue if door fees were eliminated, clubs would have to institute a drink minimum, which comes with an even higher tax at 14 percent. “To keep from paying the Adult Entertainment Fee, we are going to pay $1.40 inside instead of paying $1.00 tax at the door? That type of math does not make sense to any reasonably intelligent person engaged in business,” Spencer wrote in an email.
Although Cohen’s bill would have brought in about $16 million, Thompson’s bill would bring in a little over $1 million. Because the adult entertainment fee proposed by Thompson is an occupational tax, Texas law requires that 25 percent of the proceeds go to the foundation school programs, bringing the end amount given to sexual assault programs down to $800,000 a year.
“That would not pay the electric bills of the eighty four rape crisis centers across the state,” said Camp, who supported Cohen’s efforts this session. “It’s not going to get us to where we need to be, so we just can’t support Thompson’s bill.”
Thompson feels that her bill is at least one step in the right direction. “I wanted to put something concrete in place where TAASA could have a floor to build on,” she said.
Though Thompson would have repealed her bill if Cohen’s bill had passed, bringing in more money to sexual assault victims, that won’t happen this session. “[The revenue my bill proposes] is a good start. You will have something that you can work from rather than coming back and trying to create something,” she said.