Texas, Strip Clubs Fight It Out Over $5 Tax on Customers

DALLAS -- Texas is about to make it more expensive to watch a little bump and grind.

In what some have dubbed the "pole tax," the Lone Star State will require its 150 or so strip clubs to collect a $5-per-customer levy, with most of the proceeds going to help rape victims. The tax goes into effect on New Year's Day.

Club owners and some of their customers say the money is going to a noble cause, but they argue that the tax infringes on their First Amendment right to freedom of expression, that it will drive some bars out of business and that it unfairly links their industry to sex crimes.

"We'll be fine. I've already stopped advertising, and we're raising our cover charges. But this is going to kill some of the smaller clubs," said Dawn Rizos, who with her husband runs the Lodge, a Hemingway-inspired place that has exotic animal heads on the walls and is packed after Dallas Cowboys games at nearby Texas Stadium.

The strip clubs are suing to block the tax, which state officials estimate will raise more than $40 million a year, based on liquor sales figures. If accurate, the estimate suggests at least 8 million people a year go to Texas strip clubs to get a lap dance or watch women pole-dance.

Supporters of the tax say they are not out to close the clubs — that would just mean less money for victims of sexual assault.

"This is an industry that largely employs women, and this gives them an opportunity to raise funds for a crime that affects women," said state Rep. Ellen Cohen, a Houston Democrat who sponsored the bill, approved by the Legislature in May.

"I've been told the fees to get into these places can be $10, $15. I don't think another $5 is going to prevent someone from going," said Cohen, who is also president of a women's center that could get financing from the new law.

Most places will probably raise drink prices and cover charges, or start charging a cover if they don't do so already.

Texas' topless spots range from dimly lit dives with pickups lined up outside to gentlemen's clubs that resemble plush hunting lodges and attract men in business suits.

On a recent weekday at the Lodge, the cars in the valet parking lot included BMWs, a Ferrari and several Mercedes. At a table in a back corner sat Jerry Trigg, an architect who said he goes alone or takes customers to clubs in Dallas and Houston about three times a week.

Trigg said he typically spends about $50 during each solo visit and $200 or more when entertaining clients. He said a $5 tax won't affect the number of Diet Cokes he consumes, tips he doles out or lap dances enjoyed.

But Elle, a 28-year-old former Dallas dancer, said she worries the tax will hurt women like herself who work their way through college by stripping. She earned a degree from the University of Texas at Arlington and said she now runs a computer-servicing business with her husband.

Elle said she averaged $200 a day at the Lodge — "on good days, a hell of a lot more."

The owners of Players, a small topless bar in Amarillo, are among those suing the state. They said that adding a $5 tax to the $4 cover could drive away customers and force the club out of business.

"They won't pay it," said Chandra Brown, president of the company that owns Players. "They won't come in. They can't afford it."

Some customers and clubs say it is not the extra five bucks; they resent the implication that strip clubs lead men to commit sex crimes.

Rizos said the Lodge already pays the state $1.3 million a year in taxes, and the tax will be an additional $60,000 per month.

"Run the right way, these businesses can really be a benefit for the community," Rizos said. "We're a huge convention draw for the city. We raise money for charity with our car washes."

Utah enacted a 10% tax on topless clubs in 2004. That same year, the Texas Legislature considered a $5-per-head fee, with the money going toward schools. But lawmakers didn't like the link between strip clubs and kids — the idea was mocked as "Tassels for Tots" — and the proposal died.

The idea was resurrected last summer by the Texas Association Against Sexual Assault as a way to open more rape-crisis centers.

In their lawsuit, the clubs said nude dancing is protected by the First Amendment and the state can't selectively tax it, even if it is conduct some may find offensive. Besides, they argued, the tax is so broad it could apply to concerts by performers like Madonna or Britney Spears who wear low-cut tops.

Jonathan Turley, a constitutional law expert at George Washington University, said the Texas tax goes too far.

"It seems clear legislators are targeting strip clubs because they're unpopular," Turley said. "Laws like this would expose any unpopular industry to punitive taxes. It could be abortion clinics."