Is Stripping an Artistic Dance? Clubs Seeking Tax Exempt Status Think So

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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The New York Court of Appeals, the state’s highest court, is deliberating on a case that argues exotic lap dances should be tax exempt under state law.  New York state law exempt businesses from charging state sales tax for viewers of “dramatic or musical arts performances.”  Attorneys for a strip club in Albany are arguing that the state cannot collect $400,000 in back taxes from the club because lap dancing should be considered an art form.

Attorneys for the state have rejected this contention, arguing that the women who strip and perform lap dances are hired untrained, and clubs do not qualify for the same tax exemption enjoyed by the ballets or Broadway theaters that work with trained professional dancers.  The state contends that patrons do not attend strip clubs to view artistic or dramatic dances, but are there solely to see women remove their clothing.  State attorneys do not believe that unscripted moves to house music qualify as art, and would limit the definition to choreographed performances.

Others would disagree with the State’s limited interpretation of what is considered artistic dance.  State attorneys were challenged by a lower New York court on the point that only choreographed dances qualify because many forms of interpretive and contemporary art are impulsive and improvisational.  Further, a female dancer interviewed disputed the contention that the dancers do not work to practice their craft saying that many of the girls in the club spend hours dancing when nobody is there so they can be ready to perform.  The New York Court of Appeals even heard testimony from a cultural anthropologist who visited the club as an expert witness, and declared that the exotic dancing taking place there does, in fact, qualify as an art form.

The court’s ruling, which would have tax consequences for the estimated 150 – 200 night clubs in the state, could set an interesting precedent about what the state considers artistic or dramatic performance.   An attorney for a New York City night club with a similar matter says that Pennsylvania, Texas, and Nevada are each considering cases like this one.  Tax exemption for artistic performances is not uncommon as many states place a high importance of cultural arts.  If courts in New York and other states were to find in favor of strip clubs, and deem exotic dancing to be a form of art, strip clubs across the country could seek similar rulings and gain exemption for state sales tax. 

It is easy to smile at a case like this, but attorneys for the strip club make a good point about the state’s right to evaluate performance and determine what constitutes art.  When a state makes a broad tax exemption for cultural expressions, the question about who gets to decide where the line raises interesting interpretations of the law and the arts.

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