The New York Appellate Court has unanimously upheld the state Division of Taxation’s assessment of an Albany-area adult “juice bar” called Nite Moves for nearly $125,000 in unpaid taxes, plus penalties and interest, based on its failure to collect sales tax on admission charges and “private dance” sales.
The club, which allows patrons to “view exotic dances performed by women in various stages of undress,” charges a separate fee for “couch sales” or dances performed for customers in private rooms. The club argued that such dances are exempt from tax as “dramatic or musical arts performances” (NY Tax Law § 1105(f)(1)).
Rejecting expert testimony from a cultural anthropologist, the five-judge panel found that “at a bare minimum” the club failed to prove that private dances were choreographed performances or that the club was a “theater in the round” exempt from state sales tax. The judges also dismissed the club’s claim that the tax was unconstitutional, ruling that the New York statute is “facially neutral and in no way seeks to levy a tax upon exotic dance as a form of expression.”
677 New Loudon Corporation, d/b/a Nite Moves v. State of New York Tax Appeals Tribunal, et.al., #509464, June 9, 2011
