By Mike Dunn
PHILADELPHIA (CBS) — Calling the city’s amusement tax “vague and inconsistent,” Philadelphia’s Tax Review Board today rejected Mayor Nutter’s attempt to impose a tax on lap dances performed in gentlemen’s clubs.
The Nutter administration earlier this year had sent tax bills in the hundreds of thousands of dollars to three gentlemen’s clubs, with city officials contending that the amusement tax applies to lap dances performed in back rooms.
But the city’s Tax Review Board said the law creating the tax was vague and can only reasonably be applied to cover charges, not to other activities.
“It is well settled that when interpreting a statute’s intent that the language used should be given its usual and ordinary meaning,” board chair Nancy Kammerdeiner said in issuing the ruling. “It is the finding of the Tax Review Board that a charge for admission to an amusement is generally understood to be the fee paid at the door to gain entrance to the venue.”
In addition, the board ruled that the Nutter administration could not retroactively impose a tax on lap dances — including charges of interest and penalties — when it had never done so before.
George Bochetto, an attorney representing two of three clubs in the case, was pleased with today’s ruling.
“This is not just a victory for these particular three gentlemen’s clubs,” he said, “this is a victory for every commercial establishment in Philadelphia that has a door charge, that conducts any kind of interior activity: piano bars, pool halls, karaoke — all of these places of entertainment benefit by this ruling.”
Club Risqué and Cheerleaders, represented by Bochetto, faced bills totaling nearly $900,000. Delilah’s, represented by attorney Stephen Howard, was assessed more than $630,000 in back taxes, interest, and penalties for lap dances.
Bochetto says the ruling proves that the administration can’t simply decide on its own to reinterpret an existing tax:
“If the city wants to impose an amusement tax on this kind of interior activity, that is a legislative function. That’s something that City Council needs to take up, debate. If they want to pass an ordinance like that, then they can do so, ” Bochetto said.
The city has the right to appeal the decision to Common Pleas Court. A spokesman for the Nutter administration says officials are reviewing the ruling and have not yet decided on any further steps.