Tennessee considers taxing adult entertainment - WMC Action News 5 - Memphis, Tennessee

Tennessee considers taxing adult entertainment

A bill to impose taxes on adult entertainment services, products and performers is on hold. A bill to impose taxes on adult entertainment services, products and performers is on hold.

(WMC-TV) – A bill to impose taxes on adult entertainment services, products and performers is on hold.

If passed, people who view adult films in their homes would be included in the proposed tax.

The item was up for discussion in the Tennessee Senate Tuesday, but the Tax Subcommittee chairman skipped over Senate Bill 2860.

It's unclear if the delay happened because the bill's sponsors have to go back to the drawing board due to a legal challenge.

The Tennessee State Legislature is bracing for battles on bills to tax everything that has anything to do with adult entertainment.

"I do have grave reservations about it," said Memphis Mayor A C Wharton.

All of Shelby County's adult-oriented businesses are located in Memphis.

Wharton said, as a former defense attorney, he's seen how women are exploited and driven into adult entertainment.

"I'm simply not comfortable with licensing it and making money off of it," he said.

Three Middle and East Tennessee Republicans are sponsoring the bills that would impose a 25% adult entertainment tax.

Adult cabaret performers would pay a privilege tax.

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.

Money collected would be used to reduce Tennessee's food sales tax, which is highest in the nation, according to The Tax Foundation.

Wharton said the state bill conflicts with a new law passed by the Shelby County Commission.

"It's kind of schizophrenic," he said. "On the one hand we want to regulate it out. On the other hand we want to make money off of it. We've got to make our mind up which way we want to go."

Starting in January, Shelby County began enforcing stricter adult-oriented business laws, including an annual $500 business permit, and $100 work permit for employees, background checks, a ban on beer and alcohol, no touching and all dancers must cover their private parts.

Wharton said making money from adult entertainment validates it.

"Maybe I'm old-fashioned on it because folks will readily say you've got a lottery in Tennessee, you're validating gambling," he said.

Before the item came up for a vote Tuesday, a First Amendment group out of New York filed a memo of opposition, claiming that the bill is too broad and hinders free speech that has nothing to do with adult entertainment.

A state House committee is scheduled to discuss the item Wednesday.

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