You can dance but you can't bet on Roman

Catholic Palm Sunday and Roman Catholic Easter Sunday at Nassau OTB. Surely there must be a dancer and lawyer who can sue Andrew Cuomo for violating the NY Const. Art. 1, Sec. 3 rights of dancing bettors?

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• NY REGION
• October 23, 2012, 11:15 p.m. ET

Lap Dances Subject To Tax

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By JACOB GERSHMAN

New York's highest court ruled Tuesday that strip clubs aren't entitled to sales-tax exemptions granted to higher-brow entertainment such as ballets and operas.
In a 4-to-3 decision, the state Court of Appeals ruled against an Albany-area strip club, Nite Moves, which had challenged the state's sales-tax policy on constitutional grounds.
The state claimed the club's $11 cover charge and $20 lap dances were subject to an 8% sales tax. Nite Moves's attorney argued that the same tax code that exempts "dramatic or musical art performances," such as ballets, should also apply to strip-club performances. The club accused the state of acting as a dance critic and decreeing what counted as art.
The court, though, rejected that view, upholding an earlier Tax Appeals Tribunal decision. "Clearly, it is not irrational for the Tax Tribunal to decline to extend a tax exemption to every act that declares itself a 'dance performance,' " stated the majority opinion.
On the dissenting side, Associate Judge Robert S. Smith said the rulings against the club raise "significant constitutional problems." Chief Judge Jonathan Lippman joined in the dissent.
Wrote Mr. Smith: "Like the majority and the Tribunal, I find this particular form of dance unedifying—indeed, I am stuffy enough to find it distasteful. Perhaps for similar reasons, I do not read Hustler magazine; I would rather read the New Yorker. I would be appalled, however, if the State were to exact from Hustler a tax that the New Yorker did not have to pay, on the ground that what appears in Hustler is insufficiently 'cultural and artistic.'"
Nite Moves CFO Stephen Dick said he was "saddened and surprised" by the defeat and would talk to the club's lawyers about legal options. "We are hopeful the federal courts will agree to hear this case and overturn the state," he said.
A 2005 state audit found Nite Moves owed about $124,000 for not charging sales tax on covers and dances. The club paid the bill plus interest so the case would be heard. A follow-up audit is expected to find the club owes another $400,000, Mr. Dick said.

A version of this article appeared October 24, 2012, on page A21 in the U.S. edition of The Wall Street Journal, with the headline: Lap Dances Subject To Tax.