Hearing In Philly Continues On Lap Dance Tax

Hearing In Philly Continues On Lap Dance Tax

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PHILADELPHIA -

The Nutter administration has decided that so-called lap dances should be subject to the city's five percent amusement tax.

The city's tax review board will ultimately decide whether lap dances, those up close and personal, one-on-one performances by dancers, are subject to the amusement tax.

But at today's hearing we got to see what lots of business owners complain about: a lack of consistency, and predictability, in tax policy.

Back in 2006, the city's revenue department audited the books at Club Risque on South Columbus Boulevard.

They made sure the club was paying its "amusement tax." Remember, this was under the Street administration and it was pre-recession. With that in mind, listen to this exchange between George Bochetto, the lawyer representing the club, and Ted Pagano, a club Risque advisor.

"What did they assess the amusement tax on?" says Bochetto.

"On the admission charge," responds Pagano.

"Did they assess at that point any amusement tax on any of the lap dances which were all disclosed through all the records?" asks Bochetto.

"Not that I'm aware of," answers Pagano.

"And did the city, in 2006, in any way, shape or form, indicate that lap dances may be the subject to the amusement tax?" asks Bochetto.

"Not at all," answers Pagano.

The club was audited again in 2012, this time with Michael Nutter as mayor and an economy still reeling from recession. This time, says Pagano, the club received a bill for well over $300,000, amusement tax on lap dances plus interest and penalties.

"They blind-sided us with the notion that there should have been a tax on lap dances," says Pagano.

"This is the same audit department from the same city of Philadelphia that was there in 2006, right?" asks Bochetto. "Same ones," answers Pagano.

"If Club Risque were forced to pay that money for back taxes, could they afford to do so?"asks Bochetto.

"No."

"What would happen to that business?"

"It'd be in big trouble," predicts Pagano.

That wasn't the only hit the city took: a deputy solicitor was roundly criticized at today's hearing for questioning a witness for the strip clubs about his own business tax bills. He was suggesting they were overdue.

Review board members said the line of questioning was out of bounds, irrelevant to this case. And Attorney Bochetto exploded, accusing the city of trying to embarrass and intimidate those who question their tax bills.

No ruling on this case yet, but things are getting tense.

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