The owner of an ‘adult “juice bar”’ (basically, a strip joint) in Latham, New York, argued that it did not have to pay state tax levied on admissions to places of amusement, on the grounds that the kind of dancing displayed in the establishment was a tax-exempt ‘dramatic or musical arts performance’. The New York tax appeals tribunal rejected that argument, and the owner appealed: 677 New Loudon Corp v State of New York Tax Appeals (NY App, 23 October 2012).
Four of the seven judges hearing the appeal held that the taxpayer had failed to show that the dances in question qualified for the exemption, in part because the expert evidence it tendered (yes, really) ‘was not based on any personal knowledge or observation of “private” dances that happened’ at the establishment. It was therefore reasonable for the tax appeals tribunal to discredit the expert opinion. There was no reason to treat these dances – ‘however artistic or athletic their practiced moves are’ –any differently from ice dancing performances, which can be ‘intricately choreographed’ but which are nevertheless treated as taxable entertainment. Three judges dissented: the majority was making ‘a distinction between highbrow and lowbrow dance’ which was not supported by the governing legislation. The statutory requirement for choreography of some kind was satisfied because the dances at issue were ‘dance routines’. ‘It does not matter what kind of dancing is being done’, since the statute did not specify that the exemption is available only to ‘dance worthy of a five-syllable adjective’. Any deficiencies in the expert testimony simply didn’t matter; it was superfluous and may have been a misguided attempt to ‘impress the Tribunal with the cultural value of the entertainment’ on offer. To make a distinction based on the perception that the dancing was ‘unedifying’ or ‘distasteful’ was discriminatory and probably unconstitutional.
[Link available here].