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AMUSEMENT TAX AND CABARET TAX PROVISIONS ARE NOT UNCONSTITUTIONALLY APPLIED TO AN ADULT ENTERTAINMENT CLUB; TAX EXEMPTIONS FOR CERTAIN TYPES OF DRAMATIC OR MUSICAL ART PERFORMANCES ARE PROPERLY NOT AVAILABLE TO THE CLUB.

The First Department, in a full-fledged opinion by Justice Tom, determined the provisions of the Tax Law which allow the imposition of an amusement tax and a cabaret tax were not unconstitutional either facially or as applied to the plaintiffs.  The plaintiffs operate a men’s entertainment club featuring topless dancers (Hustler Club). The Tax Law includes exemptions for certain types of entertainment, i.e., dramatic or musical art performances. Plaintiffs argued the exemptions should apply to the adult entertainment at the club, as well. In rejecting the constitutional arguments, the court wrote:

Here, the Tax Laws are laws “of general application” … . The Amusement Tax applies to sales at “[a]ny place where any facilities for entertainment, amusement, or sports are provided” (Tax Law § 1101[d][10]), and the Cabaret Tax applies to sales at “[a]ny roof garden, cabaret or other similar place which furnishes a public performance for profit” (Tax Law § 1101[d][12]). The Tax Laws “ha[ve] not selected a narrow group to bear fully the burden of the tax” … , since the taxes imposed on plaintiffs are equally applicable to many other types of entertainment and recreational activities, including sporting events, car races, amusement parks, arcades, zoos, animal performances, and magic acts … . Nor are the performances of the sort presented at the Hustler Club “singled out for special treatment”… based on their erotic, sexual, or adult nature. The performances merely happen to fall under the very broad categories of “entertainment” or “amusement,” for purposes of the Amusement Tax, and “public performance for profit,” for purposes of the Cabaret Tax. CMSG Rest. Group, LLC v State of New York, 2016 NY Slip Op 07280, 1st Dept 11-3-16

TAX LAW (AMUSEMENT TAX AND CABARET TAX PROVISIONS ARE NOT UNCONSTITUTIONALLY APPLIED TO AN ADULT ENTERTAINMENT CLUB; TAX EXEMPTIONS FOR CERTAIN TYPES OF DRAMATIC OR MUSICAL ART PERFORMANCES ARE PROPERLY NOT AVAILABLE TO THE CLUB)/AMUSEMENT TAX (AMUSEMENT TAX AND CABARET TAX PROVISIONS ARE NOT UNCONSTITUTIONALLY APPLIED TO AN ADULT ENTERTAINMENT CLUB; TAX EXEMPTIONS FOR CERTAIN TYPES OF DRAMATIC OR MUSICAL ART PERFORMANCES ARE PROPERLY NOT AVAILABLE TO THE CLUB)/CABARET TAX (AMUSEMENT TAX AND CABARET TAX PROVISIONS ARE NOT UNCONSTITUTIONALLY APPLIED TO AN ADULT ENTERTAINMENT CLUB; TAX EXEMPTIONS FOR CERTAIN TYPES OF DRAMATIC OR MUSICAL ART PERFORMANCES ARE PROPERLY NOT AVAILABLE TO THE CLUB)/ADULT ENTERTAINMENT (AMUSEMENT TAX AND CABARET TAX PROVISIONS ARE NOT UNCONSTITUTIONALLY APPLIED TO AN ADULT ENTERTAINMENT CLUB; TAX EXEMPTIONS FOR CERTAIN TYPES OF DRAMATIC OR MUSICAL ART PERFORMANCES ARE PROPERLY NOT AVAILABLE TO THE CLUB)

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