YNOT
  • Home
  • Industry News
    • Adult Business News
    • Adult Novelty News
    • YNOT Magazine
    • EU News
    • Opinions
    • Picture Galleries
  • PR Wire
    • Adult Company News
    • Adult Retail News
    • Adult Talent News
    • Adult Videos News
  • Podcasts
  • Industry Guides
    • Adult Affiliate Guide
    • Affiliate Marketing for Beginners
    • Top Adult Traffic Networks
    • Top Adult PR Agents
    • Funding an Adult Business
  • Business Directory
    • View Categories
    • View Listings
    • Submit Listing
  • Newsletters
  • Industry Events
    • Events Calendar
    • YNOT Cam Awards | Hollywood
    • YNOT Awards | Prague
    • YNOT Cammunity
    • YNOT Summit
    • YNOT Reunion
  • Login with YNOT ID

Hustler Club Sales Tax Appeal Denied

Posted On 12 Dec 2017
By : GeneZorkin

NEW YORK – In the latest development in a case which reaches back to 2008, an appeals court in New York upheld a lower court’s decision holding that semi-nude dancing at the Hustler Club in Manhattan is not a type of performance which is exempt the club from paying sales tax.

The appellate court found it had no cause to overturn the lower court’s ruling, which held the performances of erotic dancers were not “dramatic art performances,” meaning the club is unable to claim an exemption on that basis from a 4% sales tax.

In her opinion, Justice Christine Clark wrote the club’s attorneys failed to meet content and venue requirements contained in the relevant portion of the statute, §1105 (f)(1) of New York Consolidated Law, and added the club’s “remaining arguments are either unpreserved, rendered academic or lacking in merit.”

Under the relevant portion of the law, the statute states “there shall be paid a tax of four percent upon… (a)ny admission charge where such admission charge is in excess of ten cents to or for the use of any place of amusement in the state, except charges for admission to race tracks or combative sports which charges are taxed under any other law of this state, or dramatic or musical arts performances.”

The case has been bouncing about New York courts since an audit of the club conducted by the New York Department of Taxation and Finance, which inspected Hustler Club returns from June 2006 through November 2008 and found the club owed more than $4.8 million. Despite negotiating the sum down to $2.1 million, the club pushed ahead with an appeal to the New York Division of Tax Appeals on artistic grounds and for other causes.

Administrative Law Judge Donna M. Gardiner was not exactly receptive to Hustler Club’s arguments, writing at the time that the club “provides a service to its patrons that essentially boils down to performers who remove their clothing and create an aura of sexual fantasy.”

“The plain facts of this case have been obfuscated in an attempt to characterize [semi-nude erotic dancing as] live dramatic, choreographed performances,” Gardiner added. “However, the services provided by the entertainers at the Hustler Club is sexual fantasy, not dance.”

In addition to shooting down the club’s artistic arguments, the court found that all “scrip” sales (scrip in this context being an in-house substitute for cash paid for with credit cards) were also taxable income.

“In addition to the 20 percent surcharge imposed on its scrip-purchasing customers, the club charged entertainers and floor hosts a fee to redeem the scrip paid to them by patrons,” the court found. “Specifically, the club collected 10 percent of the face value of scrip redeemed by entertainers and 30 percent of the face value of scrip redeemed by floor hosts. The club recorded the amount paid to it by floor hosts as ‘service fee income.’”

The court found that while some of the scrip may have been used to buy table dances or to tip dancers, the club had failed to definitively establish how much of the scrip sold to customers went towards such payments. Without such an accounting, the appellate court held the lower correct was correct in finding all scrip sales to be taxable.

Unfortunately for Hustler Club, the court didn’t find its other arguments persuasive, either.

“Finally, we are unpersuaded by petitioners’ various constitutional arguments,” the court said, “many of which are, in essence, a repetition of challenges that were previously raised and rejected.”

 

New York Supreme Court photo © sbpp

About the Author
Gene Zorkin has been covering legal and political issues for various adult publications (and under a variety of different pen names) since 2002.
  • google-share
Previous Story

Seven Tips for Crafting Effective CTAs

Next Story

System JO Selects Nalpac As Preferred Partner

Related Posts

New on ‘Adult Site Broker Talk’: Nate Mallory of Only Tax Deductions

New on ‘Adult Site Broker Talk’: Nate Mallory of Only Tax Deductions

Posted On 08 Jul 2025
, By GeneZorkin

Angel Grave Releases New Scene with Nicky Rebel

Posted On 20 Jan 2025
, By newswire
CrystalRush

MILF Madness – Crystal Rush Headlines at Larry Flynt’s Hustler Club in Nashville

Posted On 10 May 2023
, By Alyssa

Leave a Reply Cancel reply

You must be logged in to post a comment.

Sponsor

YNOT Shoot Me

YNOTShootMe.com has exclusive pics from adult industry business events. Check it out!

YNOT Directory

  • The European Summit
    Industry Trade Show & Events
  • Vend Content
    General Business Services
  • Adultsmart
    Online Retail Stores
  • Premiere Listing

    ComeShootMe

    More Details

RECENT

POPULAR

COMMENTS

“The Tip” That Left Them Wanting More: CAM4 Creators Speak Out – Live and Unfiltered

Posted On 10 Jul 2025

Ella Rose Stuns In New Scene On Arch Angel Video

Posted On 10 Jul 2025

Adult Star & Businesswoman Lauren Phillips Discusses Her Brand on HRU

Posted On 10 Jul 2025

Vanessa, Meet Vivid

Posted On 29 Sep 2014
Laila Mickelwaite and Exodus Cry

Laila Mickelwaite, Exodus Cry and their Crusade Against Porn

Posted On 03 May 2021

Sex Toy Collective Dildo Sculptor

Posted On 19 Mar 2019

Find a good sex toy is now a problem,...

Posted On 18 Mar 2024

Thanks to the variety of sex toys, I can...

Posted On 02 Feb 2024

I understand the concerns about...

Posted On 05 Jan 2024

Sponsor

Sitemap
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.OkPrivacy Policy