Topless Counterattack Against Titty Tax

State could face embarrassing court date after organization representing strip joints filed lawsuit over new tax on nude entertainment

The state of Texas could face an embarrassing court date after the organization representing strip joints filed a lawsuit over a new tax on nude entertainment. House Bill 1751, sponsored by freshman Rep. Ellen Cohen, D-Houston, introduced a $5 surcharge on each admission to any "sexually oriented business" (see "Return of the Titty Tax," Dec. 7), with the revenue in theory funding sexual-abuse programs and the Texas Health Oppor­tunity Pool (intended to help low-income people buy insurance). In the suit, filed Dec. 5 in Travis County, adult-cabaret industry group the Texas Entertainment Association Inc. and Karpod Inc. (which manages the Players topless bar in Amarillo) argue the surcharge is unconstitutional. They seek an injunction against Attorney General Greg Abbott and state Comptroller Susan Combs to prevent the collection of the fee when it becomes effective Jan. 1.

The association's filing describes the surcharge as an "occupational tax," and under current law, 25% of funds raised for such a tax must go to public education, which HB 1751 does not allow. The bill also extends the definition of "nude" to cover anything from full-nude strip joints to theatrical productions with partially see-through costumes. If the comptroller's office charges only strip joints, it could violate Article VIII of the Texas Constitution, which guarantees equal and uniform taxation. Attor­neys for the plaintiffs said that even if these problems could be fixed, they are secondary to the central issue: Such performances are protected speech and cannot be singled out for a special tax. The petition warned that the surcharge "is so overbroad that it will chill the protected speech of others not before the Court."

Asked for comment on the suit, the comptroller's office deferred to the attorney general's office, which declined to respond. Bill Kelly, Cohen's chief of staff, said he was disappointed that the Texas Entertainment Association had filed the suit. He said he expects the attorney general to fight it vigorously and warned the Texas Entertainment Association, "They're going to spend a lot of money on lawyers, and it's not going to do them any good." He added that if the injunction is upheld, Cohen would bring a new surcharge bill back next session. "If a judge says this is wrong because of A, B, and C," he said, "we're going to go back next session and fix A, B, and C."

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