Judge declares $5 'pole tax' unconstitutional

updated 9:30 a.m. ET April 7, 2008

AUSTIN, Texas - A $5-per-customer fee on strip club patrons dubbed the "pole tax" has been declared unconstitutional.

A state district judge ruled Friday that clubs can't collect the fee. The charge went into effect in January and was expected to raise about $44 million for sexual assault prevention programs and health care for the uninsured.

Judge Scott Jenkins wrote that the fee, "while furthering laudable goals, violates the First Amendment to the United States Constitution and is therefore invalid."

The Texas Entertainment Association Inc., which is a group of topless clubs, and Karpod Inc., the owner of an Amarillo club, sued Texas Attorney General Greg Abbott and Comptroller Susan Combs over the fee.

Witnesses for the strip clubs testified at a hearing last year that the clubs would go out of business if they had to collect an additional $5-per-patron fee.

Lawyers for the state had said the Legislature was within its rights to impose the fee on businesses that serve alcohol and offer nude performances.

Attorneys for the state have argued that the fee does not prohibit nude dancing, does not regulate what entertainers wear and does not regulate the businesses in other ways. The state can appeal the decision.

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