Strip Clubs Sue the State of Nevada Over Entertainment Taxes

Published on February 24, 2015, by Matthew Sharp


Strip Clubs Sue the State of Nevada Over Entertainment Taxes

A lawsuit filed by a number of Las Vegas strip clubs, alleging a violation of their dancers’ First Amendment rights, will be heard by the Nevada Supreme Court.

The Washington Post reports that eight strip clubs have joined in filing the lawsuit against the Nevada Department of Taxation, concerning a 2003 tax levied by the state legislature. The “entertainment tax” was placed on food and drinks sold at the clubs, as well as cover fees for entrance.

Under the threat of criminal prosecution for non-payment, the strip clubs have been paying the 10 percent tax for the last decade. However, the lawsuit states that the clubs are collectively seeking refunds, claiming that taxing performances is a violation of their exotic dancers’ rights under both the First and Fourteenth Amendments — consecutively, freedom of speech and expression and civil rights.

Attorneys for the strip club cite previous cases in which exotic dancing has been held as protected by the First Amendment. For example, a 2001 decision in Déjà Vu of Nashville Inc. v. Metropolitan Government of Nashville and Davidson County, Tennessee found “entertainers and audience members…are certainly engaged in a ‘collective effort on behalf of shared goals’,” reports the Post.

Additionally, the lawsuit states, the entertainment taxes are not only being levied against the right to free speech, but are also targeted toward a small, specific group of “speakers”— namely, exotic dancers. Meanwhile, Nevada’s Department of Taxation claims the tax does not target the dancers’ rights, but rather business transactions.

The lawsuit was originally filed in 2006 and has been decided in favor of the state three times: in a state court in Clark County, again before the Ninth Circuit Court of Appeals, and in a Las Vegas federal court. The state Supreme Court will consider procedural processes that the strip clubs may pursue, following their rejected requests for refunds of the taxes.

Reno trial lawyer Matthew L. Sharp is experienced with handling business-related lawsuits. If you’re considering a lawsuit related to tax or insurance disputes, employee rights or other business matters, Mr. Sharp can help. Contact our firm today to discuss the details of your case.

NOTE: Mr. Sharp is not representing the plaintiffs in this case.