Home > News > Texas Appeals Court Strikes $5 Gentlemen’s Club Tax • Bookmark   • Newsletters   • Register Search Options


Texas Appeals Court Strikes $5 Gentlemen’s Club Tax

Texas Appeals Court Strikes $5 Gentlemen’s Club Tax
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
Yes, but in a few years
Out of 150 votes. Results based on votes submitted by members of XBIZ.net social network.
Jun 6, 2009 12:15 AM PDT    Text size: 
AUSTIN, Texas — A Texas Court of Appeals panel upheld on Friday a lower court ruling striking down a tax that imposed a $5 tariff for each customer entering a sexually oriented business, or SOB.

On appeal, Texas Comptroller Susan Combs argued that the SOB tax does not violate the 1st Amendment, that the SOB tax does not violate the Texas Constitution, that sovereign immunity bars suit by the Texas Entertainment Association and that the trial court erred in awarding attorneys fees.

But the appeals court judges had concern over a tax that was a "content-based speech regulation" and subjected to the "strict scrutiny" required to determine if the regulation were narrowly tailored to serve a compelling governmental interest.

“Evidence that the SOB tax is aimed at reducing secondary effects of sexually oriented businesses does not preclude the proper application of strict scrutiny in this case,” the court ruled.

Having found the SOB tax unconstitutional under the 1st Amendment, the court said it need not reach the comptroller's second issue regarding appellee Karpod Inc.’s and Texas Entertainment Association's state constitutional claims.

In addition, the court overruled the sovereign immunity and attorneys fees claims by the Texas comptroller.

“We affirm the trial court's judgment declaring that subchapter B of chapter 47 of the business and commerce code is unconstitutional and permanently enjoining assessment and collection of the tax,” the court ruled.

At post time, it wasn’t clear whether the comptroller will appeal the decision to the Texas Supreme Court.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Creating a Top-Notch, Lucrative Adult Website

If there’s one thing I’ve seen consistently over the 10 years I’ve been running Elevated X and working exclusively with paysite owners it’s that no matter how competitive the paysite... More »

Artificial Intelligence Treats Risk Like Cancer

An embarrassing thing happened to me in Amsterdam. I’d just finished dinner with a new partner at a nice restaurant. OK … more expensive than nice, but you know what I mean. I grade food in... More »

8 Tips for Scaling Up Your Ad Campaign

As an advertiser it can take some time for you to get a successful campaign going because many ideas don't always work out. Once you have a great converting campaign it can also quickly die out, so that's... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ Premiere magazine, the industry's leading adult retail trade publications, delivering the most timely and comprehensive business news and information to producers and retailers of adult products.



Nov 04 - Nov 06
Edison, New Jersey

2016 Inked Awards

Nov 05 - Nov 05
Edison, New Jersey

XBIZ 2017

Jan 09 - Jan 13
Hollywood, CA

XBIZ Awards 2017

Jan 12 - Jan 12
Los Angeles, CA
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!