Upside-DownAUSTIN – The Texas House last week approved a bill that rescinds the $5-per-person surcharge imposed in 2007 on patrons of gentlemen’s clubs and instead levies a 10-percent across-the-board tax on admission fees to all adult businesses statewide.

The bill still needs a nod from the state Senate before it becomes law, but rumblings in the capitol indicate the tax will fly through.

Although it may seem odd, the bill received widespread support among Texas’ adult enterprises, most of which indicated a 10-percent tax would be fairer to patrons than a $5 cover charge. In addition, an across-the-board tax would dig legislators out from under constitutional objections now pending before Austin’s 3rd Court of Appeals after Texas’ cabaret trade association sued the state and won by attacking the $5 “pole tax” law on free-speech and funds-distribution grounds.

According to bill sponsor State Rep. Senfronia Thompson [D-Houston], the 10-percent tax does not place an undue burden on one category of protected speech: exotic dancing. Thompson’s bill passed muster with the Texas Entertainment Association, which took the pole tax to court.

“We’re going to be able to end the lawsuit and allow the state to be able to spend $11 million,” Thompson told The Houston Chronicle.

The $11 million collected to date under the pole-tax law is being held by the state comptroller pending final outcome of the legal challenge.

The new tax is expected to raise between $4 million and $8 million annually. Seventy-five percent of the funds are earmarked to support sexual-assault programs. The other one-quarter would support public schools, as required by Texas law of all occupation taxes.

The $5 pole tax was expected to raise at least $12 million annually.

Critics of the 10-percent tax say it will raise very little money, if it raises any at all. Most adult stores do not charge admission fees, they noted, and gentlemen’s clubs may avoid the tax by lowering or doing away with their cover charges.

The bill, officially known as HB982, passed by a vote of 141-1.