NYC strip club tries to dodge taxes by claiming strippers are like therapists
Points for creativity: A midtown strip club was denied $3 million in tax relief after claiming that its exotic dancers were the equivalents of masseuses or sex therapists, and thus not subject to taxes. The Daily News reported that the Penthouse Executive Club made that argument to a New York state tax appeals tribunal and was rebuffed last month.
At issue was the club's sale of "executive dollars," which is essentially play money that's sold on the premises. Customers use it to buy dances or tip hosts. The dancers and club employees then exchange it for real cash at the end of the night.
After auditing the club in 2010 and 2011, the New York Department of Taxation and Finance determined that the club had to pay $3.1 million in taxes on the sale of $28.4 million in executive dollars, ruling that they were basically the same as admission tickets to an amusement park.
Although in this case customers handed over tickets to be ridden, instead of to ride anything – that likely would've been a distinction that didn't make a difference to the tax tribunal. In an April 19 decision, they shot down Penthouse's argument “that what is provided in its clubs is not entertainment, but rather a nontaxable service similar to a therapeutic massage conducted in a sensual manner or personal services provided by a sex therapist."
Read more: http://www.metro.us/news/local-news/new-york/nyc-penthouse-club-taxes
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