Another Plan to Tax Adult Entertainment in Calif. Is Launched

CHULA VISTA, Calif. — A California bill that would impose a 20 percent tax on sales of adult movies and sex toys, as well as the receipts of strip clubs, has been introduced in the Legislature.

California Assemblywoman Mary Salas, D-San Diego, introduced the proposal Wednesday morning, which would send revenue from the tax to a newly created Adult Venue Impact Fund.

The fund would then be distributed to local law enforcement agencies in an effort to deal with secondary effects that are associated with adult entertainment businesses.

Free Speech Coalition lobbyist Ignacio Hernandez said the bill could be found unconstitutional on several points, including taxation based on the content of a movie.

"This measure is clearly unconstitutional and unworkable," Hernandez said. "This bill is much broader than previous efforts to tax adult movie and novelty retailers. Therefore, it suffers from greater constitutional defects than prior bills."

Hernandez said the broad definition of “harmful material” included in the bill’s language would likely be opposed by entertainment organizations like the Motion Picture Association of America.

"Punishing legitimate retailers who choose to locate in neighborhoods with a need for commercial tenants is not the type of policy we need during these tough economic times," Hernandez said.

He also noted that the bill was introduced several weeks past the normal legislative deadline.

"As soon as this bill was announced this morning we began working the halls of the state Capitol to stop this unconstitutional measure as quickly as possible," he said. "This is not part of the larger budget discussions since it is not even scheduled for its first hearing until after next week's Legislative budget deadline. It would not get to the governor until the fall of this year."

Specifically, Assembly Bill 847 would levy a 20 percent tax on the gross receipts of any California business that is:

  • A retail establishment whose gross receipts from the sale or rental of adult material exceeds 50 percent of all gross receipts.
  • Providing a public or private viewing of adult material.
  • An establishment that offers live sexually explicit conduct that is prohibited to audiences under 18 years of age or 21 years of age, depending on whether alcoholic beverages are sold on the premises.
The last measure in the California Legislature was put on hold in April. That piece of legislation, Assembly Bill 1082, would create a 12-percent excise tax on all tangible adult entertainment products in California.

A hearing on the latest proposed porn tax bill is scheduled for next month.