ALBANY -- Whether exotic dancing is art - and should therefore be tax-exempt - is an issue of First Amendment freedoms, according to the owner of an Albany-area strip club.
As such, Stephen Dick Jr., 36, wore a tie decorated with the American flag to his case before New York's high court Wednesday. Judges heard oral arguments from Dick's lawyer and the state on whether the owners of Nite Moves, an adult entertainment club, should have to pay state sales tax on admission fees and "couch sales," fees patrons pay for private dances.
"People may not like this on moral grounds, but on artistic grounds and on First Amendment grounds, there is no question - if you start drawing lines, you have no clear line to stop at," Dick said after the arguments. "If it's exotic dance today, it can be rap music next year or dubstep music. It can be slasher films five years from now.
"Where is the line on art?" he continued. "You have to draw it as safe as you can to protect the freedoms."
A 2005 state audit found that Nite Moves owed nearly $125,000 in taxes, plus interest, although Dick said a subsequent audit has raised that bill to about $400,000.
The club fought the state Division of Taxation's assessment, arguing that the dancers provided "dramatic or musical arts performances" that are "choreographic" in nature, which are tax-exempt under state law.
Nite Moves relied largely on the expert testimony of a cultural anthropologist who specializes in exotic dance. She has testified that the dances at Nite Moves "unequivocally" meet state standards.
An administrative law judge first agreed with club owners, but then the state Tax Appeals Tribunal and a state appeals court ruled that Nite Moves had to pay up.
At Wednesday's case before the New York Court of Appeals, the state argued that Nite Moves provided no proof that the private dances, as well as table and lap dances the women provide to customers, are choreographed.
"The Tribunal reasonably concluded that just sitting and moving in a patron's lap is not choreographed movement," said Assistant Solicitor General Robert Goldfarb, who argued on the state's behalf.
But the judges debated whether the Legislature's use of the word "choreographic" in the statute meant that dances needed to consist of planned movements. Judge Robert Smith said he interpreted "choreographic" as simply a synonym for dance.
That exotic dance is not art in terms of the law was one of the state's two arguments.
Additionally, under state law, "a cabaret or similar place" - even one with "dramatic or musical arts performances" - should be taxed if it makes a significant amount of money in refreshment sales.
The state argued Nite Moves' refreshment sales were significant, as the club had a two-drink minimum with substantially marked up prices - $5 for a non-alcoholic drink - and the receipts for drinks were more than the receipts for admission.
But Smith argued that the refreshments aren't what attracts customers.
"If it's the refreshments that are bringing people in, then it's taxable," the judge said. "You're not claiming that anyone came to this bar for juice?"
Goldfarb responded: "Absolutely not. . . . But I would submit that if the women kept their clothes on, no one would be coming to this bar for the dance performances."
While Andrew McCullough, the club's lawyer, said it was not the state's job to be a dance critic, he stressed that the dancers were masters of their craft.
"If it is under consideration for an Olympic sport, these girls would be in standing to make the team," he said. "They're that good."
He said he has seen videos the club prepared for the purpose of proving the dancing was "choreographic" art. The women wore bikinis.
"Not only have I watched them, but I am almost sure that all seven of those judges have watched them," he said.
After the arguments, McCullough said he was optimistic.
"Am I going to get four out of seven on my side? Yes," he said. "They wouldn't have brought it here to just rubber stamp this. That is not what they do."