The Palomino Club Blog

Manhattan strippers provide 'sex therapy', says tax evaders

May 12, 2017  |   1:12 pm

A New York strip club is at odds with the state tax board to the tune of $3.1 million. Not a small chunk of change by any stretch of the imagination. Equally imaginative was their excuse: the Manhattan strippers at the Penthouse Executive Club aren’t providing entertainment, but rather they are part of a nontaxable service closer to professional massage and sex therapy. Clever bastards.

It’s an argument as oily slick as the skin of a stripper having put on the hottest lap dance of her life. Real knees-shaking, dangerously-close-to-mutual-contact, creeping into pay-per-view Skinemax territory. Unfortunately for the club in question, it didn’t exactly fly with the tax appeals tribunal. These Manhattan strippers might be professionals in one sense, and some of ’em might even be stripping their way through med school for that PhD.

While a spirited argument could be made in a private room regarding the true nature of their services, they aren’t doctors yet. At least, according to a decision upheld by the judge presiding over the appeal.

This “interpretation” of Manhattan strippers is the latest chapter of the drama

The owners of the Penthouse club have a history of ‘alternate ideas’ about the actual form and function of people and things. The tax battle began some time after the club began offering “executive dollars”, an in-house currency and customers can use to purchase services from the entertainment, or tip waitresses. Patrons ‘buy’ the money when they enter the club, and can exchange what they have left for real money at the end of their visit. Of course, the club charges a 13% fee when exchanging the executive dollars for US dollars.

In 2010 and 2011, the state’s Department of Taxation and Finance performed audits on the club, and determined that it needed to pay taxes on the sale of executive dollars, citing them as similar to to a theme park admission fee. This added up to $28.4 million owed to New York.

What the Penthouse Executive Club argued was that the ‘executive dollars’ are actually ‘play money’. The executive dollars are supposed to make transactions with the Manhattan strippers/doctors/therapists more convenient. Which is an argument, for sure.

The (financial) Troubles

Strip clubs have to stay successful to make the payments that keep them successful. You’ve got to pay your sex therapists- strippers, sorry. If you’ve got a bar, you need to keep it stocked. You want your place to look and feel nice to visit, for gentlemen and ladies alike.

However, the Penthouse Executive Club has been falling on hard times, according to its owners. Despite the the vaunted, multi-faceted services provided by its Manhattan strippers, the club has been struggling to make ends meet. The last four years have seen a serious drop in the club’s receipts, which may have partially inspired attempts to evade taxes if we’re being charitable.

They may actually be onto something, though! Get some exceedingly hot massage therapists on stage, and have ’em shake that ass as part of a… muscle tensing session. Maybe live shows with sex therapists and strippers treating very mutual problems as intimately as possible. Insurance is a mess all over the country, but maybe my provider can cover the services my sudden and very real condition needs.

Might not be a legal act in New York, though.