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NY Strip Club's Lap Dances Are Not Tax Exempt, Court Rules

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By Cynthia Hsu, Esq. on June 15, 2011 6:43 AM

Say you're in the business of stripping and giving lap dances. Tax deductible? Nice try, but no.

At least, so says a New York Court. Nite Moves, a New York strip club trying to appeal a $125,000 tax on its lap dances from a 2005 audit, argued that the lap dances were "dramatic or musical art performances" and therefore tax exempt, reports Reuters.

The court was not convinced, ruling instead that the lap dances were in fact rightfully taxable, according to Reuters.

The court's ruling, however, was not based on Nite Moves being in the business of giving private dances. Instead, the court found its decision based on the fact that Nite Moves did not adequately prove up their claims that the private dances were dramatic or musical art performances that would be under the tax-exempt umbrella, reports Reuters.

How did Nite Moves try to go about winning its case? By bringing in an expert witness, a cultural anthropologist. The expert testified that the dances at Nite Moves were "live dramatic choreographic performances" and used "similar kinds of movements" that are performed on stage, which also qualifies as a choreographed performance, reports Reuters.

But, apparently, the expert had never actually seen private dances at Nite Moves. She based her anthropological observations on watching private dances at other establishments in the past, and on some DVDs that were introduced as evidence by Nite Moves that did not even contain footage of private dances, according to Reuters. Oops!

The court also said that the dancers at Nite Moves didn't seem to have received any formal training, reports The Wall Street Journal.

Still, Nite Moves' attorneys have not thrown in the sweat towel. They plan to appeal their case, reports The Wall Street Journal. So for now, a lap dance tax still exists - but maybe in the future, lap dances everywhere will be recognized as choreographed, tax-exempt artistic performances.

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