Dec 27, 2007 3:28 am US/Central
Strip Club Owners Alter Argument Against State Fee
AUSTIN (AP) ―
Texas strip club owners redirected their argument against the state's pending $5-per-customer surcharge, calling the fee an occupation tax that violates the state constitution.
The Texas Entertainment Association and Karpod Inc., the owner of an Amarillo club, want a judge to stop the state from collecting the fee, which the Legislature approved earlier this year and takes effect Tuesday.
Lawmakers dedicated the income from the fee -- projected to be more than $40 million -- for sexual assault prevention programs and health care for the uninsured.
The clubs' association sued Texas Attorney General Greg Abbott and Comptroller Susan Combs earlier this month.
In a motion for partial summary judgment filed Friday, the clubs argued the new fee violates the Texas Constitution's requirement that a quarter of the revenue generated by all occupation taxes must be set aside for public schools.
"Obviously, that's a constitutional requirement that cannot be ignored by statute," said David B. Brooks, an Austin lawyer and author of "Texas Practice: County and Special District Law." Brooks is not involved in the case.
Also in the Friday filing, the clubs argued in the fee is not "an equal and uniform occupation tax" because it doesn't apply to businesses such as nude modeling studios and adult arcade theaters. The tax is thus unconstitutional, the clubs argued.
Brooks said that argument wasn't valid. "If they want to assess some topless clubs but not others, that would be unconstitutional," he said.
An attorney for the clubs declined comment Wednesday.
Last week, a judge denied the clubs' request to temporarily block the strip club fee from taking effect. In that request, the clubs focused on the argument that the tax violated the First Amendment protection of nude dancing as free expression.
Lawyers for the state argued that the law doesn't prohibit nude dancing or dictate where it takes place. The judge said he was not persuaded that the clubs faced "imminent irreparable harm."
The fee takes effect New Year's Day, but the funds aren't due to the state comptroller's office until April. A hearing is scheduled for Jan. 22 on the clubs' request to block the state's collection of the fee.
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