U.S. Supreme Court Won't Hear "Pole Tax" Case

The U.S. Supreme Court will not take up the adult entertainment industry's lawsuit against the state's $5-per-patron strip club tax, justices decided Monday. 

“Texas is now one step closer to a sustainable source of funding for rape crisis centers, and most importantly, for supporting sexual assault survivors in their recovery,” said Annette Burrhus Clay, executive director of the Texas Association Against Sexual Assault. 

That means the Texas Supreme Court's ruling — that the fee does not violate the First Amendment — stands. But it doesn't mean that the industry, years into its legal battle, can't file yet another suit against other elements of the tax. 

After lawmakers passed the Sexually Oriented Business Fee Act — or "pole tax" — during the 2007 legislative session, strip club owners immediately challenged the fee in court. They argued it violated their freedom of expression under the First Amendment.

The suit wound its way to the Texas Supreme Court, where justices in August 2011 ruled that the fee was directed not at the expression of nude dancing, but at the "secondary effects of nude dancing when alcohol is being consumed." Adult entertainment businesses can "avoid the fee altogether simply by not allowing alcohol to be consumed," Justice Nathan Hecht wrote in the court's ruling.

The adult entertainment industry appealed to the U.S. Supreme Court, which on Monday declined to hear the case.

Proceeds from the tax go to support low-income health insurance and programs combating sexual assault. But as of August, only about $14.5 million had been collected, a fraction of the $40 million that lawmakers expected the fee to generate in its first year. And most of it was sitting in the bank awaiting a final legal ruling.