Tax Proposed on Patrons of Adult Businesses

If you can’t beat ‘em, tax ‘em.

That is the new tactic Simi Valley city leaders may adopt in their years-long fight to keep sexually oriented businesses out of their conservative suburban community.

While the courts debate the merits of Simi Valley’s restrictive zoning rules for strip clubs, adult bookstores and massage parlors, Councilman Paul Miller proposed something new: Taxing the patrons of sexually oriented businesses as much as $15 or $20 per visit.

“The city has a so-called ‘bed tax,’ which visitors pay when they rent a room in a hotel or motel,” Miller said at a City Council meeting Monday night.

“Given that there is a documented and proven additional workload caused by [sexually oriented businesses] for both the police and code enforcement, why not consider putting on the ballot for voter consideration a tax on admission to any nude dance establishment here in our city?”

Legal and government experts said the idea is a first in California--and possibly the nation. While surcharges or user fees on cigarettes, alcohol, hotel beds and gambling establishments are fairly common, experts could not recall a tax specific to patrons of massage parlors, strip joints, X-rated bookstores or other adult businesses.

In the spring, a state senator attempted to tax the receipts of such businesses, but the proposal died in committee.

Miller’s colleagues immediately warmed to the idea of taxing the people who frequent adult businesses--should one ever open in Simi Valley.

While perhaps innovative, the idea was blasted as unconstitutional by the lawyer who represents Simi Valley businessman Phil Young, who has sought to open a nude dance club since 1993.

“I’ve got to give them credit for trying,” said attorney Roger Jon Diamond. “The tax would be unconstitutional and discriminatory because you cannot discriminate on the basis of it being a 1st Amendment business.”

Constitutional attorneys and lawyers who help cities craft ordinances regulating adult businesses agreed that such a fee on patrons likely would not pass legal muster.

It might be legal to tax all entertainment businesses, but to tax just those providing a specific form of entertainment oversteps constitutional bounds, they said.

“Simi Valley should tax the patrons of restaurants so there would be a fund of money to pay health inspectors instead,” Diamond continued. “If I lived in Simi Valley, I would worry more about the chef who sneezes in the food than . . . someone watching a dancer take her clothes off.”

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Nevertheless, Miller’s colleagues greeted the proposal with delight and instructed the city attorney to look into the legalities of such a sin tax, which would have to be approved by Simi Valley voters. They also asked their counsel to look into licensing such businesses, so that owners and employees could be subject to criminal background checks.

Such a tax would be used to offset costs of extra police patrols and code inspections that sexually oriented businesses generate. The amount of the tax could be much less than $15, depending on the amount of additional law enforcement required.

Whether the proposed user fee would require a simple or two-thirds majority depends on what kind of tax it is, said City Atty. John Torrance.

Either way, citizens would approve the referendum, predicted Mayor Greg Stratton).

“This isn’t exactly a tax-loving city, but I think we may have found an issue they would support,” he said.

Miller’s proposal came after he and city staffers attended a League of California Cities conference on sexually oriented businesses.

This family- and safety-minded city has been locked in a battle against a proposed strip club for years. The city’s zoning restrictions on adult businesses recently were ruled unconstitutional by a U.S. District Court judge in Los Angeles. The city has appealed that decision.

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Because courts have ruled that seeing a striptease performance is protected by the 1st Amendment’s guarantees of free speech and expression--as opposed to smoking a cigarette, say--taxing adult businesses could prove constitutionally thorny, legal analysts said.

The idea of taxing patrons could be a first in the country, said Scott Bergthold, general counsel of the National Family Legal Foundation, which co-hosted last week’s conference with the League of California Cities. The Scottsdale, Ariz.-based group helps cities write laws that regulate such businesses without running afoul of the courts.

“It is an unusual idea,” Bergthold conceded. “Our recommendation to cities that come up with novel ideas generally is to stay away from them because they tend to get in trouble by not sticking with court-approved practices. . . . It’s better to use the number of options that have been tested--and upheld--in court than to try one yourself and experiment.”

USC law professor Erwin Chemerinsky was unsure if the tax would be constitutional.

Critics would argue that such a tax would hamper free speech, he said. But cities would counter that taxing patrons is a less restrictive way to regulate the so-called “secondary effects” of adult businesses--namely, crime and prostitution--than attempting to ban them or limit their locations.

While it is legal to tax businesses that are protected by the 1st Amendment--such as newspapers or pornographic magazines--they cannot be taxed discriminatingly based on their content, said Terry Francke, executive director of the California First Amendment Coalition.

For example, The Nation, a left-leaning magazine, cannot be taxed at a higher rate than the conservative Weekly Standard, he said.