The titillation taxman is coming.
Strip clubs that haven’t been turning over sales taxes on lap dances may find themselves more broke than a customer in their champagne room in the wake of a landmark court ruling.
A state appeals court has dismissed a bid by an Albany-area strip club to wiggle out of paying $125,000 in back sales taxes on lap dances and admission fees charged to customers — and the ruling is arousing “exotic” dance clubs in the Big Apple.
Nite Moves in upstate Latham had sued the state, arguing that dancing at its club is performance art worthy of a sales-tax exemption — like ballet.
But the Appellate Division on Thursday unanimously ruled that Nite Moves was a typical jiggle joint subject to the sales tax — more bump-and-grind than art.
“In our view there can be no serious question that — at a bare minimum — petitioner failed to meet its burden of establishing that private dances offered at its club were choreographed performances,” Justice John Egan Jr. wrote in the Appellate Division, Third Department ruling.
“The record reflects that the clubs’ dancers are not required to have any formal dance training.”
The ruling got a rise out of the city’s strip-club operators — some of whom admitted they weren’t even aware of the longstanding T&A tax.
The Lace Gentleman’s Club in Midtown charges a flat $20 admission’s fee and $20 for a short lap dance.
Manager Steve Johnson said he didn’t know there was a sales tax on erotic dancing.
“We would have to pay every time someone gets a dance? It makes no sense. It’s just another way to take money from people,” Johnson said.
“Customers would have to pay more to get a dance. It would kill the business even more. It’s ridiculous.”
A staff worker at Rick’s Cabaret dance club in the Garment District also said he was unaware of the tax. Rick’s also charges a $20 admission fee and $20 for lap dances.
The combined state-city sales tax would come to 8.875 percent. That means the clubs would have to turn over nearly $2 for every admission fee and lap dance.
The state Tax Department said no one should be surprised. Strip joints have been covered by the sales tax since 1965, said spokeswoman Susan Burns.
“Once you are registered for sales-tax purposes, you are responsible for collecting and remitting both state and local sales taxes to the Tax Department, along with any use tax you may owe. The ruling confirms the department’s position as to taxability of the admission charges and lap dances at these establishments,” she said.
Andrew McCullough, the lawyer for Nite Moves, said he will seek to have the ruling overturned in the state’s highest court, the Court of Appeals.
“This is a free-speech issue. The state doesn’t get to be dance critic,” said McCullough.
Sliding scale
Avg. lap dance: $20
With 8.875% sales tax: $21.60
Avg. admission charges: $20-$30
With 8.875% $21.60-sales tax: $32.40