Topless Tax Terminated

District Judge Scott Jenkins

The "titty tax" – a $5 surcharge for everyone attending a sexually oriented business in Texas – has been declared unconstitutional and so will not be collected. On Friday, March 28, Judge Scott Jenkins of the 53rd District Court in Travis Co. said that by singling out nude performance, the tax, imposed by the 2007 Legislature, violated the First Amend­ment of the U.S. Constitution. Jenkins had previously rejected a request for a temporary injunction on Dec. 17, from the Texas Entertainment Association Inc. and Amarillo-based management firm Karpod Inc. (see "Does Harry Potter Cause Sexual Violence? Only in Texas," Dec. 28, 2007). At the time, Jenkins said the plaintiffs could not show immediate harm before the tax came into effect on Jan. 1. But with the April 20 collection deadline looming, he permanently enjoined the state comptroller's office from collecting the tax and ordered the state to pay the plaintiffs' fees. On Monday, the attorney general's office put out a statement saying it will "vigorously appeal" the judgment.

House Bill 1751, which established the surcharge, describes it as a "fee," but Jenkins said it is effectively a tax on content and therefore unconstitutional. He also rejected claims by the AG, that legislators may have considered a secondary effect, of a link between alcohol and nude performance causing sexual violence, but that's something that bill author Rep. Ellen Cohen, D-Houston, repeatedly said the bill did not attempt to do. Jenkins said there is no evidence to suggest this was ever considered by legislators or that, even if there were a secondary effect, there was a correlation between the tax raised and the secondary effect's impact. In a press release, Cohen said she would work next session to "refine HB 1751."

Jenkins' judgment suspends the still-unresolved question of precisely who, in what sort of venues, would have had to pay the tax. The bill extended the definition of sexually oriented business from explicitly topless clubs to any event with full or partial nudity, or even insufficiently opaque clothing, where alcohol is consumed. If this interpretation were applied, it would have included theatrical performances featuring nudity or fashion shows with translucent materials. The tax would have funded the new statewide sexual-assault program fund and the Texas Health Opportunity Pool Trust Fund. "These are programs that desperately need funding, but we never agreed with their method for funding," said Stewart Whitehead, attorney for the Texas Entertainment Association. The state, he added, should find a better way of paying for them rather than attacking one business, "particularly one that enjoys First Amendment protection."