Phila. Tax Review Board sides with strip clubs in appeal of ‘amusement’ tax; city could appeal to Common Pleas Court

By Jon Campisi | Oct 10, 2013

It seems only time will tell with regard to a possible court fight between the

City of Philadelphia and the operators of three local strip clubs.

It was reported on Wednesday that the Philadelphia Tax Review Board ruled that city officials were wrong to try and levy an amusement tax on lap dances at Cheerleaders, Club Risqué and Delilah’s.

The city’s amusement tax generally materializes as cover charges for music venues, and as fees on concert tickets and tickets to professional sports games.

The Philadelphia Revenue Department had attempted to levy the tax on lap dances provided at the three gentleman’s clubs.

George A. Bochetto, an attorney who represented Club Risqué and Cheerleaders in their respective tax appeals, had called the city’s rationale for levying the tax on his clients a “perversion of the language of the amusement tax.”

At this point, the city’s only option is to appeal the Tax Revue Board’s ruling to the Philadelphia Court of Common Pleas.

In a message emailed to the Pennsylvania Record, Mark McDonald, press secretary to Mayor Michael Nutter, said that the city was in the process of reviewing the Tax Review Board’s ruling and that city lawyers are “considering our options,” with regard to whether an appeal in civil court is warranted.

Reached by email, Bochetto, the lawyer representing two of the gentleman’s clubs, said that the tax board sustained all four grounds raised by the businesses on why the tax was “totally improper,” thus proving that the city has no valid argument left as to why the tax would be warranted.

“Any appeal would be frivolous and an abuse of process,” he wrote in his email to the Pennsylvania Record.

Bochetto said that the tax board made its ruling from the bench, and that there was no written opinion that could be provided to reporters.

The only way to review specifics would be to obtain a copy of the hearing transcript, which was not immediately available.

The Philadelphia Inquirer reported Wednesday that the Tax Review Board had stated that the amusement tax is “generally understood” to be paid only on the cost of admission to a venue, such as a concert hall or a ballpark.

The board also noted that the city’s justification for levying the tax on lap dancing was “vague and inconsistent.”

The paper reported that Tax Review Board Chairwoman Nancy Kammerdeiner, as she read the decision into the record, pointed out that the city never attempted to apply the amusement tax to the three strip clubs when it conducted municipal audits on them in the past.

“These taxpayers should not be held responsible for failing to foresee that the city’s interpretation of the amusement-tax ordinance would evolve,” the Inquirer quoted the chairwoman as saying.

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