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Annals of Predatory Taxation: 19% Tax on Dutch Sex Shows

1 min readBy: Josh Barro

Last week, the Dutch Supreme Court ruled that sex shows are theater, and therefore were eligible for a reduced taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rate for cultural performances. The AP reports:

The judges said in their written ruling that because the strippers are on a stage being watched by a paying public their acts are theatrical.

The government argued that for the lower sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. rate of 6 percent—as opposed to 19 percent—to apply there has to be “a cultural performance comparable to a music or theater performance. A peep show doesn’t come close.”

Unfortunately for Dutch sex show viewers—or, perhaps more accurately, unfortunately for foreign tourists on holiday in Amsterdam—the Dutch legislature passed legislation last year clarifying that the lower tax rate does not apply to “peep shows and other performances primarily aimed at erotic entertainment.” However, because of the court decision, taxes collected before that law passed will be returned. The unnamed plaintiff in the case expects a refund of thousands of Euros.

American readers need not fret: in the Land of the Free and the Home of the Brave, consumers of adult entertainment are constitutionally protected from discriminatory taxes. When Texas attempted to introduce a “Pole Tax”—a $5 entrance tax at strip clubs—a judge threw it out, ruling that the tax violated the First Amendment. U-S-A! U-S-A! U-S-A!