Strip Club Claimed Dancers Were Therapists To Skirt $3.1M In State Taxes

[EC]

Not quite Ridiculous News worthy, but too good to ignore:

It’s not uncommon for companies to try to finesse their way out of a hefty tax bill, but one Manhattan strip club tried a unique excuse when attempting to skirt $3.1 million in state taxes: Its dancers were providing therapy to customers, and not just entertainment.

The New York Daily News reports that the owners of the Penthouse Executive Club unsuccessfully argued to a state tax appeals tribunal that it shouldn’t have to pay taxes because its dancers proved patrons non-taxable services akin to a massage therapist or sex therapist.

The club’s tax troubles go back several years when an audit for 2010 and 2011 found that the company neglected to pay taxes on its sale of in-house currency. The currency, dubbed “executive dollars,” is purchased by patrons when they enter and can be used to tip waitresses or pay for dances.

The state’s Department of Taxation and Finance determined that the currency was similar to an admission charge and subject to taxes. As a result, an audit determined the club needed to pay taxes on an estimated $24.8 million in executive dollar sales.

The club, however, wasn’t okay with this bill and challenged it. A judge ordered the owners to pay the taxes.

That’s when the case was sent to the state tribunal, where the club owners argued that “what is provided in its clubs is not entertainment, but rather a non-taxable service similar to a therapeutic massage conducted in a sensual manner or personal services provided by a sex therapist.”

https://consumerist.com/2017/05/08/strip-club-claimed-dancers-were-therapists-to-skirt-3-1m-in-state-taxes/

[ABX]

Sounds like an accurate representation to me.

[Frank Cannon]

Apparently they are no good at their therapy. Yelp only gives them 3 stars.

[andy58-in-nh]

Therapists? Really??

For that I would expect at least 50 minutes on the couch. But I would prefer if we don't talk about my mother, okay doll?

[driftdiver]

C'mon if they don't give it to the govt the govt employees won't have any expense money to pay for hookers.

[Weird Tolkienish Figure]

... nah, too easy.

[geronl]

creative criminals

did they get any ObamaCare subsidies?

[InHeavenThereIsNoBeer]

I know this is a NY issue, but since it's a question of taxation they really need to send the Secret Service in to invest...

Never mind.

[ABX]

creative criminals....

The government?

[Wingnut]

The Tribunal did not give the club owner a happy ending.

[Hondo69]

Its dancers were providing therapy to customers, and not just entertainment.

ther·a·py noun - treatment intended to relieve or heal a disorder

Well, where do I begin?  Probably the best place to start would be to examine the trauma caused by being subjected to American TV programming such as The Housewives of ______ fill in the blank.  They give us a first hour of nothing but a bunch of bitchy rich white women only to be followed up by the next hour, a bunch of bitchy rich black women.  That ain't right.

Then I can switch over to network sitcoms where the writers have such a lack of talent they swim in the gutter of sexual innuendo.  Or, I can pay extra and get Netflix or HBO to watch their series which actually do have plots, but are mainly about sex.

Therapy?  Hell yes, I'd say we need a big dose of therapy.  And just think, a guy can still go down to a strip club where a good old American dollar bill provides the exact same value it provided in 1973.  Now that's a bargain in my book.

[rodamala]

When a guy spends 40 days straight working 16 to 18 hours a day in the oil fields of the Permian Basin, I can attest that my visit to the strip club the evening after my truck took a 9mm slug to the doorpost, 3 inches from my head, was both therapy AND a celebration of living.

[Oceander]

That's the end for the business owners.   Sales tax can be assessed personally against the owners even if the business is in a corporation, the interest rate in NY on unpaid sales tax is about 14%, and it can't be discharged in bankruptcy.