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Georgia tax on adult clubs now under fire

On Behalf of | Nov 16, 2017 | Corporate & Business Tax |

Have you ever heard someone say you can’t legislate morality?

Try to determine who first said that and you might find yourself running in circles. An internet search isn’t particularly fruitful. Former pro wrestler and politician Jesse Ventura is credited with having said it once. Economist Milton Friedman once suggested that government often tries to legislate morality, but does so at high cost. And one attorney is notably on record as saying “If anyone tells you that you cannot legislate morality, remember that legislation IS morality?

We bring this up because of a story related to Georgia state taxes that recently made headlines. You might have read about it. An association representing owners and operators of adult entertainment clubs is suing the attorney general and the head of the Department of Revenue in a bid to have a new tax law declared unconstitutional.

Voter support does not make law constitutional

The law in question is SR7. Voters approved the measure last year, creating the Safe Harbor for Sexually Exploited Children Fund. To finance the fund, the Legislature approved a tax on adult strip club operators – a move the Georgia Association of Club Executives says illegally infringes on free speech rights.

As the head of the association puts it, “The tax is unconstitutional because it places a content-based tax on free speech of which certain members of the Legislature do not approve.”

The association leader, who happens to be a woman, says the intent of the law – to protect minors from sexual exploitation – is clearly admirable. However, she says the tax holds adult clubs ostensibly responsible for the problem when they are not. She says strip clubs strictly ensure that their entertainers and patrons are of legal age. They are not a gateway into sex trafficking of minors. Collection of the tax is due to begin next April.

Whether the law can withstand legal scrutiny will have to be seen. What we can feel certain about is that attorneys experienced in helping clients facing tax agencies across the U.S. will be watching to see how the case plays out.

We insist that your taxpayer rights are protected and your options are known.

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