It’s the people versus Larry Flynt all over again. A Manhattan club named after the onery porn pioneer had tried to argue that its lap dancers are giving artistic performances, but a New York judge says the bare facts speak for themselves.
In determination dated Jan. 30, Judge Donna M. Gardiner of the New York State Division of Tax Appeals ruled that CMSG Restaurant Group LLC, owner of the Larry Flynt’s Hustler Club on West 51st Street, must pay $2.1 million in back taxes because the private-room lap dances offered by its strippers do not constitute dramatic or musical art performances.
The Nevada-based restaurant company had argued that it qualifies for a tax exemption on admission fees under a New York State statute reserved for amusement establishments that offer live, dramatic choreographed or musical performances. While Gardiner agreed that the Hustler Club is a place of amusement, she found that a tax exemption for lap dances violated the intent and meaning of the statute.
“[I]t must be determined whether the service provided by the entertainers constitutes a live dramatic, choreographic or musical performance within the meaning and intent of the Tax Law such that the admission charges are exempt under the statute. I find that these performances do not meet the standards set forth for exemption," Gardiner wrote.
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CMSG had filed a petition for the exemption for the period from June 1, 2006, through Nov. 30, 2008. (At the time the company was known as HDV Manhattan LLC.) According to the determination summary, representatives for the company argued their case by presenting video footage of Hustler girls doing dance routines, although the footage was taken after hours and the girls did not strip as they would during an actual routine. Witnesses for the company, one of whom has a background in dance, also discussed the agility required to perform such routines. Two “dance experts” testified on behalf of the company, as well -- all in an effort to present the routines as being on par with an artistic presentation.
Gardiner was unconvinced, however, and said the facts of the case were being “obfuscated” in an attempt to take advantage of a tax exemption meant for more aesthetically minded pursuits. “This adult entertainment establishment provides a service to its patrons that essentially boils down to performers who remove their clothing and create an aura of sexual fantasy,” Gardiner wrote.
The judge is not alone in that finding, nor is the Hustler Club alone in attempting to take such an exemption. In 2005, after the Division of Taxation audited the Upstate New York club Night Moves, officials found that its admission fees were subject to sales tax. The club had claimed an exemption for at least three years prior, arguing that its pole dancers qualified as an artistic performance under the statute. The case made it all the way to the Court of Appeals, New York’s highest court, which narrowly ruled against the club in a 4-3 decision. Steven Dick Jr., the club’s owner, had attempted to bring the case before the U.S. Supreme Court, but was denied in October 2013, as the Albany Times Union reported.
On the flip side, as UPI reported Thursday, the Tax Review Board in Philadelphia recently struck down a lap dance tax in that city.
According to Gardiner’s summary, the Hustler Cub generates most of its revenue from admission fees to the private rooms where the women perform lap dances.