Texas Appeals Court Strikes $5 Gentlemen's Club Tax

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.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

The Cowgirl Debuts 'Saddle' Sex Machine

Cowgirl has introduced its new Saddle sex machine with attachments.

XR Brands Debuts 'Jock Enhancers' Collection

XR Brands has introduced its new Jock Enhancers line.

Kyrgyzstan President Signs Measure Outlawing Internet Porn

President Sadyr Japarov of Kyrgyzstan on Tuesday signed into law legislation outlawing online adult content in the country.

NC Legislature Overrides Veto of Extreme Anti-Adult Industry Bill

The North Carolina state legislature on Tuesday voted to override Gov. Josh Stein’s veto of a bill imposing regulations that industry observers have warned could push adult websites and platforms to ban most creators and content.

Report: VPN Downloads Soar in UK Following Age Verification Deadline

Virtual private network apps, which can be used to circumvent geo-specific age verification requirements, are topping Apple App Store downloads in the U.K. in the wake of new Online Safety Act rules, the BBC is reporting.

Blush Introduces 'Golden Dawn' Dildo From Avant Line

Blush has debuted the Golden Dawn dildo from its Avant Collection.

Orion Debuts 'Nodding Head' Vibe From Sweet Smile Line

Orion Wholesale has introduced the Vibrator With a Nodding Head from its Sweet Smile line.

Strike 3 Holdings Sues Meta for Pirating Vixen Media Group Content to Train AI

Vixen Media Group owner Strike 3 Holdings filed suit in federal court this week, accusing Facebook parent company Meta of copyright infringement and alleging that Meta has extensively pirated VMG content to train its artificial intelligence models.

Full Circle Debuts New 'Cleo Feather' Vibe

Pleasure brand Full Circle has introduced its new Cleo Feather Tickler vibrator.

Pjur Launches 'Toy' Line in North America

Pjur has announced its Toy series of wellness products will be available for purchase in the U.S. starting in September.

Show More