PHILADELPHIA — Common Pleas Judge Ellen Ceisler today rejected the City of Philadelphia's attempt to tax lap dances in strip clubs.
Philadelphia Mayor Michael Nutter's administration was appealing a decision by the state Tax Review Board, which said the city's application of the amusement tax of five percent on admission charges was inappropriate.
The board last year said that the amusement tax law is so vague that it can only be reasonably applied to a club’s cover charge, not to other activities. But city attorneys said that the board got it wrong.
According to CBS Philly, Club Risqué and Cheerleaders faced tax bills totaling about $900,000. A third club, Delilah’s, was assessed more than $630,000 in back taxes, interest and penalties for lap dances.
Ceisler, making a ruling after a short hearing, sided with the strip clubs, whose lawyers argued that the clubs already pay the amusement tax on cover charges, that "interior activities" are not subject to the tax and that the city was applying the tax inconsistently.
Attorney George Bochetto, who represented Cheerleaders and Club Risque, said that "if the city wants to tax interior amusement activities, then they need to go to City Council."
"Ask City Council to amend the ordinance, and they can start imposing a tax on lap dances," he said. "Or anything else they want: karaoke songs, piano playing. Anything they want. But you have to put it in the ordinance. You just can’t make it up as you go along.
"It's plain that the amusement tax is crafted in a way to apply to door charges, admissions fees, cover charges," he said. “It is not intended to cover interior entertainment issues. I think the swiftness of Judge Ceisler’s ruling sends a message to the city that it’s time to give it up. It’s time to call it a day.”