Business Journal of Phoenix, 1/9/06 - Adult businesses in the state and Valley could soon face more restrictions, regulations and even higher taxes.

Phoenix Mayor Phil Gordon and the socially conservative Center for Arizona Policy are among those favoring increased restrictions on adult-oriented businesses such as strip clubs and cabarets.

Gordon, a centrist Democrat, has already successfully pushed zoning changes to keep new adult businesses and strip clubs out of downtown Phoenix. The mayor has also favored increased regulations and reporting requirements for strippers and other workers at adult-oriented businesses.

Mayoral spokesman Scott Phelps said Gordon would be open to additional restrictions and even higher taxes on adult and other undesirable business.

"We would not oppose an increase in the state's sales tax on transactions involving pornography and other 'adult' items," said Phelps. "We would prefer, however, a way to limit these kinds of businesses and the proliferation of their sad, sad merchandise."

Local governments -- including Scottsdale and Phoenix -- have been trying to restrict where and how adult businesses can operate and more regulations are expected this year.

There is also some momentum behind increasing taxes on pornography, strip clubs and other adult businesses. Such plans have been put forward in Kansas, last year by a group of Democratic U.S. senators and in Europe.

Italy has approved a 25 percent new tax on pornography. That is similar to a porn tax in place in France.

The conservative CAP group lists restricting adult businesses as one of its top priorities for the 2006 session at the Arizona state Capitol.

CAP, whose former head Len Munsil is running for governor, has been a vocal opponent of pornography and adult businesses, arguing they hurt communities and degrade women. Adult businesses counter that they are being picked on by opponents and they are protected by the U.S. Constitution and are legal business.

The CAP group also backs a controversial plan to allow businesses to write-off contributions to private school scholarship funds. That tax credit is already available to families and individuals and conservative groups want it extended to businesses. Gov. Janet Napolitano, a Democrat, vetoed a Republican private school tax credit bill last year and GOP leaders promise to send a similar one to her this month.

A number of lawmakers -- including Napolitano and U.S. Sen. Jon Kyl -- declined to comment when asked if they would support increased taxes on pornography and adult businesses.

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