State Supreme Court hears challenge of tax on strip clubs

ATLANTA – Georgia’s 1% tax on strip clubs to raise money to combat child sex trafficking singles out the wrong target, a lawyer for the Georgia Association of Club Executives told the state Supreme Court.

The General Assembly passed the Safe Harbor Act in 2015 to generate a source of revenue to support rehabilitative care and other social services for sexually exploited children. Georgia voters overwhelmingly approved a referendum the following year to add the act to the state Constitution.

But the tax unfairly punishes owners of businesses that aren’t responsible for child sex trafficking because minors aren’t allowed in the clubs either as dancers or customers, Alexander Volokh argued during a hearing challenging the constitutionality of the law. Massage parlors and lingerie modeling studios would be more appropriate targets for such a tax, he said.

“Everybody knows adult entertainment establishments are horrible,” Volokh told the justices. “(But) the legislature lumped very dissimilar entities together. Certainly, child sex trafficking is a problem, but it’s not the adult entertainment establishments.”

But Georgia Deputy Solicitor General Ross Bergethon said lawmakers relied on studies linking prostitution with strip clubs in passing the bill. Therefore, taxing adult entertainment businesses is appropriate, he said.

“The state is trying to mitigate the negative social effects of these businesses,” he said.

Volokh also argued the law is a form of “content-discriminatory taxation” that violates First Amendment protection of freedom of procession long upheld by the courts.

Bergethon countered that the state has the same right to tax strip clubs as it does other entertainment venues including movie theaters and sports stadiums.

“Strip clubs have no more constitutional protection than these other activities,” he said.

The case came to the state Supreme Court after the association of more than a dozen adult entertainment establishments appealed a ruling from a Fulton County trial court dismissing their lawsuit against the state and Georgia Revenue Commissioner Frank O’Connell.

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