NASHVILLE, Tenn.—It’s like déjà vu all over again in Tennessee, where state lawmakers have taken a page out of their own playbook to once again propose an across the board 25 percent tax on adult entertainment-related activities. The Senate and House versions are S.B. 2860 and H.B. 3081, respectively.
According to Senate sponsor Stacey Campfield (R-Knoxville), the bill would impose the stiff tax on “strippers, escort services, pornography, pornographic material, things like that.”
Campfield, who backed a failed attempt to pass the exact same bill in 2007, is being modest in her evaluation of its reach. According to news station wmctv.com, “All adult-oriented sales would be taxed, including entry fees into strip clubs, adult film theaters and adult reading materials. Escort services, and advertising would fall under the tax. And even cable TV movies viewed in your home or a hotel would be taxed.”
A read of the bill reveals that lawmakers appear to have included every variable except internet and mobile commerce, but even there the language is vague and could be interpreted to include delivery platforms that are not named. For example, Section 3(f) of the proposed bill reads, in part, "There is levied a tax of twenty-five percent (25%) on the sale or rental of personal property, membership dues and fees, sales of tickets or other charges for admission, entering into or engaging in any kind of recreational activity or viewing any motion picture for which a fee is charged in any adult bookstore or any sexually-explicit business." (Emphasis added)
However, the bill also defines a "sexually-explicit business" as "a business at which any nude or partially denuded individual, regardless of whether the nude or partially denuded individual is an employee of the sexually-explicit business or an independent contractor, performs any service:
"(A) Personally on the premises of the sexually-explicit business; and
"(B) During at least thirty (30) consecutive or nonconsecutive days within a calendar year for:
"(i) A salary;
"(ii) A fee;
"(iii) A commission;
"(iv) Hire;
"(v) Profit; or
"(vi) Any other compensation."
As written, that section seems to apply to brick-and-mortar strip clubs and private clubs only, as much of the language of the bill does, but it could also be interpreted to extend to online chat services that provide "premises" for the performers.
Likewise, the language pertaining to escort services doesn't mention the internet or mobile wireless networks, but neither does it omit them. Section 3(g) reads, in part, "There is levied a tax of twenty-five percent (25%) on an escort service or service-oriented escort bureau on amounts paid or charged by such escort bureaus for any transaction that involves providing an escort to another individual." (Emphasis added)
It's all rather vague and arbitrary, including the assessment of the taxes, which do not apply to movies that receive an "R" or even "NC-17" rating from the Motion Picture Association of America; in other words, movies that by definition contain the exact same content found in many "adult entertainment" movies will not be taxed an extra 25 percent.
How the sponsors explain that good sin/bad sin scenario is unexplained, but when questioned about the bill's constitutionality, Campfield—who is apparently unaware that pornography is protected speech unless it involves minors or is deemed obscene in a court of law—characterized the bill as just another sin tax, adding, "The [rate proposed] is very similar to things we tax like cigarettes and alcohol.”
Campfield said the combined taxes could raise as much as $55 million for the state, to be used to reduce the state sales tax on food items. In other states, the revenue from similar bills is often directed to programs that address alleged secondary effects and sex offenses claimed to be caused by adult entertainment. Directing that revenue to a completely unrelated agenda is unusual and could be used to question the underlying justification for the levies.
Of course, the underlying justification is clear as day: the state needs money and thinks it can squeeze the guts out a vulnerable industry, even if it means the end of that industry and the loss of all the jobs it creates. Talk about short-term thinking.
The bill's salient Section 3 is reprinted here:
SECTION 3. Tennessee Code Annotated, Section 67-6-212, is amended by adding the following new subsections thereto:
(f) In addition to any other applicable tax, there is levied a tax of twenty-five percent (25%) on the sale or rental of personal property, membership dues and fees, sales of tickets or other charges for admission, entering into or engaging in any kind of recreational activity or viewing any motion picture for which a fee is charged in any adult bookstore or any sexually-explicit business. The sale or rental of personal property subject to this tax shall include, but not be limited to, sexually-oriented material, devices, or paraphernalia, including adult novelties, risqué gifts or marital aids.
(g) In addition to any other applicable tax, there is levied a tax of twenty-five percent (25%) on an escort service or service-oriented escort bureau on amounts paid or charged by such escort bureaus for any transaction that involves providing an escort to another individual.
(h) In addition to any other applicable tax, there is levied a tax of twenty-five percent (25%) on individual charges for viewing sexually-explicit movies received from cable and wireless cable television channels or in hotels or motels.
(i) In addition to any other applicable tax, there is levied a tax of twenty-five percent (25%) on magazines, books and other adult materials that are restricted to viewing by minors pursuant to § 39-17-914.
(j) In addition to any other applicable tax, there is levied a tax of twenty-five percent (25%) on advertising for a sexually-oriented business, adult cabarets, adult bookstores, escort services, service-oriented escort bureaus and sexually-oriented escort bureaus.
(k) Nothing in subsections (f) - (j) shall apply to motion pictures designated by the rating board of the Motion Picture Association of America by the letter “R” for restricted audiences, persons under seventeen (17) years of age not admitted unless accompanied by parent or adult guardian, or the designation “NC-17", persons under seventeen (17) years of age not admitted.
