High Court Approves "Pole Tax" on Strip Clubs

The Texas Supreme Court has unanimously ruled that a $5-per-patron tax on strips clubs does not violate the First Amendment, adding the latest chapter to a four-year legal battle. 

After the 2007 Legislature passed the law known as the Sexually Oriented Business Fee Act — or the "pole tax" in the vernacular — strip club owners challenged the fee in court. They argued it violated their freedom of expression under the First Amendment.

But the court today disagreed, saying 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," according to the decision written by Justice Nathan Hecht.

Proceeds from the tax go to support low-income health insurance and programs combating sexual assault. As the case has worked its way through the legal system, many strip club owners have simply stopped paying the fee. About $14.5 million, a fraction of the $40 million lawmakers expected the fee to generate in its first year, has been sitting in the bank since the law took effect. Only 111 of the state's 176 strip clubs have paid the fee over the past four years. Now they will likely get a note from the comptroller's office asking for that money — plus interest, a spokesman there told The Texas Tribune in July.

The strip club owners could still decide to appeal their case to the U.S. Supreme Court.