Texas Supremes Ponder 'Pole Tax'

On March 25, in a hearing that lasted just over 45 minutes, the Texas Supreme Court became the latest judges to hear the fight between the adult cabaret industry and the attorney general over the infamous stripper surcharge.

Alternatively nicknamed the "pole tax" and the "titty tax," the $5-per-customer fee on live nude entertainment at venues allowing alcohol consumption was passed by the Texas Legislature in 2007. Since then, Texas Entertainment Association and Karpod Inc. have successfully challenged it in two lower courts. In this latest appeal by the state, Solicitor General James Ho has argued that the law served two purposes for the state, both raising revenue and removing "the combustible combination" of nudity and alcohol, which he said contributes to sexual violence. He told the court, "Four decades of precedent support the state's power to impose even greater restrictions on adult businesses under Texas law."

However, Justice Harriet O'Neill quickly interrupted, "That's presuming this is interpreted to be a restriction rather than a tax." She voiced her concerns that the case was "on new ground" by using a tax to regulate content. Justice Paul Green pointed to the questionable logic of distinguishing between live and videotaped nudity, while Justice David Medina called the tax "more of a punishment" than anything else.

Countering the state's claims of public safety concerns, Texas Entertainment Association attorney Craig Enoch argued, "This is a tax case; make no doubt about it." If the state was serious about policing conduct, he claimed, this law was a failure, since it was like selling people licenses to shout "Fire!" in a crowded theatre. Chief Justice Wallace Jefferson echoed that argument, saying the state may appear "hypocritical [for] profiting off the very thing it condemns."

Though the hearing lasted less than an hour, don't expect a quick decision. Since this law involves complex questions of both tax code and the First Amend­ment, it could be years before the Texas Supremes issue a ruling – one that is expected to involve several dissenting and concurring opinions. Even if a judgment is forthcoming, there are potential violations of the Texas Constitution within the law that may take the fight back to a lower court. If it all hangs on the First Amendment, both sides are prepared to take it to the U.S. Supreme Court.