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Harrisburg to consider a ‘user fee’ for strip clubs and adult entertainment in PA

The bill, from a suburban Philly Republican and a Berks County Democrat, is modeled on Texas law.

Cassie Owens, Reporter/Curator

A pair of Harrisburg lawmakers have a plan to levy a $5 entrance fee on strip clubs and other sexually oriented businesses to raise money for rape crisis centers and domestic violence centers.

The bill, called the Sexually Oriented Businesses Revenue Act, was first introduced in the last session, ending up in the finance committee. Rep. Thomas Murt, a Republican from Hatboro, is leading the re-introduction of the bill alongside Rep. Tom Caltagirone, a Democrat from Reading. Murt told Billy Penn that they’re currently seeking more co-sponsors, but will bring the bill back in the next two weeks.

According to an older version of the bill, a sexually oriented business is defined as follows:

(1) A nightclub, bar, restaurant or similar commercial
enterprise that:

(i) Provides for an audience of two or more individuals live nude entertainment or live nude performances.

(ii) Authorizes on-premises consumption of alcoholic beverages, regardless of whether the consumption of alcoholic beverages is under a license or permit issued under the act of April 12, 1951 (P.L.90, No.21), known as the Liquor Code.

(2) The term excludes a theatre as defined under section 2 of the act of June 5, 1937 (P.L.1656, No.344), known as the 30 Store and Theatre Tax Act.

(3) An adult entertainment venue.”

Aside from strip clubs, sexually oriented businesses include adult movie theaters, X-rated bookstores, cabarets, nude model studios and adult spas. Murt is careful not to use the word “tax.” Elsewhere, legislation like this is commonly referred to as such, under the terms “skin tax” or “pole tax.” But Murt frames this more as a “user fee.”

“We are not going to the taxpayers so to speak… the appetite for taxes on income is not there,” Murt said. “We were trying to be creative about how to divert away funds for those very important missions.”

Domestic violence centers received $17.4 million in state funding for this fiscal year, while rape crisis centers received $9.9 million. Proponents of the bill see it as means to alleviate the strain on centers, which advocates have long argued are overburdened. Billy Penn has not found any evidence that links sexually oriented businesses to an increase in domestic violence. Experts don’t agree on the influence that SOBs  (yes, that’s the common lawmakers’ term) have, if any, on the occurrence of sexual violence. 

Murt added the fee itself isn’t set in stone: “It could be $3; it could be $2; it could be $1,” he explained. “We are agreeable to that— we want to get this to the finish line.”

This bill was inspired by legislation out of Texas, which passed a law to impose $5 entrance fees on sexually oriented businesses in 2007. This law faced legal challenges for several years, making it to the Texas Supreme Court. There were multiple legal arguments launched against the bill, chief among them that nude dancing is a form of expression, and therefore protected under the First Amendment. In other words: you can’t tax free speech. But the Texas Supreme Court upheld the law, ruling that strip clubs could avoid the fee if they sold no alcohol on the premises, but the state could levy fees otherwise. Texas collected $22.2 million from 187 SOBs, but Kevin Lyons, press secretary at the Texas Comptroller’s Office, clarified that this figure includes money that had been owed in years prior. The Comptroller’s Office is projecting revenue gains approaching $23 million annually for the next two fiscal years.

Jeff Levy, the executive director of the Pennsylvania Hospitality and Entertainment Association, which represents roughly 70 gentlemen’s club across the state, said his group would absolutely challenge the bill. He’s concerned that the bill if passed it would lead to diminished sales and job loss.

“I’ll bring attorneys. I’ll bring PhDs from prestigious institutions. I’ll supply academic peer reviewed studies,” he said. “If anyone is willing to challenge us, we’re willing to take the fight.”

If the bill were to pass, the PHEA would also be making a First Amendment argument. Danny Aaronson, a lawyer who works with Levy, promised there’d be other arguments too, though.

“I’m sure there would be a lot of them, but that would come specifically after looking at the bill,” he told Billy Penn. ‘I’m giving you the broad brush. I’m sure there will be other parts of the brush when we touch the canvas.”

Levy called the bill “sickening.”

“The question must be raised: Is there a correlation between gentlemen’s clubs and domestic violence? And the answer is unequivocally no,” said Levy. “You can’t just point a finger at the industry, and say ‘these things occur, and we should pay for them.’

Murt doesn’t view the bill as making a moral statement. He points out that he also has pushed a casino admission fee that would raise funds for programs for Pennsylvanians with special needs.

“This is a legitimate way to raise money,” Murt said.

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