Texas Bikini-Latex Clubs Subject to Taxation, Court Rules

HOUSTON—A Texas appeals court yesterday tossed a challenge to the state comptroller’s “pole tax” rule for venues that offer bikini-latex fare and allow the consumption of alcohol on their premises. The Houston-based 1st Texas Court of Appeals acted on an appeal from Texas BLC Inc., an association of bikini-latex clubs that argued that the opaque latex dancers use does not reveal “any statutorily specified body part.” The decision to toss the challenge reverses an earlier ruling made by the court. In yesterday’s 21-page opinion, the appellate court ruled that bikini-latex dancers at such clubs are “nude” under state law and that customers are subject to a $5-per-patron state tax. Texas BLC, in its challenge, argued that the clubs’ dancers are “clothed” because they wear bikini bottoms and their breasts are covered in latex that hardens into an opaque shell. But the comptroller testified the dancers are considered “nude” because latex does not meet the law’s definition of “clothing,” which requires the use of cloth or a cloth-like material. “Paint, latex, wax, gel, foam, film, coatings, and other substances applied to the body in a liquid or semi-liquid state are not clothing,” the comptroller wrote in a 2017 rule. The Texas comptroller, however, is still blocked from collecting the pole tax at bikini-latex clubs by a federal judge’s ruling, according to the Texas appeals court. “On June 19, 2017, the same day the underlying case was filed in state court, Texas Entertainment Association Inc. (TEA) v. Glenn Hegar, was filed in the federal district court,” said the Texas appeals court in its explanation in tossing the appeal. “TEA, like Texas BLC, is an association of bikini-latex clubs. In the federal case, TEA challenged the constitutionality of the SOB fee rule under the U.S. Constitution. While this appeal was pending, in February 2019, the federal district court granted partial summary judgment in favor of TEA, finding that the rule was unconstitutional under the First Amendment. “Because the federal district court’s decision enjoins the comptroller from collecting SOB fees from bikini-latex bars, including the members of Texas BLC, there is no live controversy between the parties that will actually be resolved by a determination of the validity of the comptroller’s SOB fee rule.” Brian Bishop, an attorney representing the Texas BLC, told the Austin American-Statesman he will ask the appeals court to reconsider its decision to not act on the appeal. Meanwhile, Texas state attorneys, according to the Statesman, are seeking to challenge the federal case at the 5th U.S. Circuit Court of Appeals.