House Sub Kills Stripper Tax Bill

NASHVILLE, Tenn. (AP) — An effort to tax strippers and adult businesses to help pay for a reduction in the state tax on coins, bullion and investment income has failed for the year.
The House Judiciary Committee on Wednesday killed the bill sponsored by Rep. Joe Carr, R-Lascassas, by sending it to a study committee after the Legislature adjourns for the year.
The bill sought to impose a 20 percent sales tax on items sold at “sexually oriented businesses,” and to require strippers to pay a privilege tax to work in Tennessee. Carr said he based the tax proposal on studies showing that adult businesses depress property values by a similar amount.
“This legislative body in years past has done this before, it has raised the taxes where one area was not paying their share based on the economic blight they might serve to a community, and we are redistributing this to another area that was overly taxed,” he said. “That’s exactly what we’re doing here.”
Carr said the measure would be projected to collect about $8.5 million per year. About $5 million would go toward reducing the state’s Hall tax on income from interest and dividends, while the remainder would go toward removing the state’s sales tax on gold, silver or platinum coins or bullion.
Tracy O’Neall, a lobbyist for the adult industry in Tennessee, noted that the tax wouldn’t apply to mainstream theaters or bookstores that might offer sexually explicit material.
“You’re singling out one sector of entertainment and this will set the state up for unnecessary litigation at incredible coast to the taxpayer,” she said. “Because this will be challenged if it is passed.”
Rep. Jon Lundberg, R-Bristol, questioned the need for reducing the tax on collectors’ items like rare coins and disputed whether supporters’ goals of drawing coin shows to the state was worth the loss in tax revenue.
The panel first rejected Carr’s amendment outlining the tax swap plan on a voice vote. Then it shipped the remaining bill to a summer study committee.

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