Some people questioned about the proposal, including Gov. Phil Bredesen, said it may be unconstitutional.

Campfield, R-Knoxville, said the proposed tax would apply - at the least - to sexually oriented materials that legally cannot be sold to persons under age 18. This would cover videos, books, magazines and sexual devices, he said.

Movies with an "R" rating or lower would not be taxed, but those with an X rating would, he said.

The bill is in the process of being researched and drafted, he said, with many details unresolved. Campfield said he is "exploring" a broader definition of what would be taxed, perhaps adding exotic dance clubs - "lap dancing and that sort of thing."

The size of the tax is also yet to be determined, Campfield said, but the goal is to raise enough revenue to allow repeal of the present 6 percent state sales tax on grocery food without damaging the state budget.

"It's a different swap tax: Remove the sales tax on groceries and raise the tax on pornography," said Campfield.

An earlier tax swap bill, which failed to pass in the last legislative session, would have raised the tax on cigarettes to end the sales tax on food.

Legislative estimates are that the sales tax on groceries generates about $450 million per year. Campfield said he expects research to determine the extent of the pornography business sales in Tennessee, then use that data calculate the rate for the proposed new tax.

"The porn industry is probably much more powerful and much more profitable than most people realize in Tennessee," said Campfield.

Dr. Stan Chervin, an expert on state taxation who serves as senior research associate for the Tennessee Advisory Commission on Intergovernmental Relations, said there is "no way" a pornography tax would generate enough revenue to allow repeal of the food tax.

"What's he going to do? Charge $2 million on a Playboy magazine?" asked Chervin.

Chervin, Bredesen and Hedy Weinberg, executive director of the American Civil Liberties Union in Tennessee, all said such a tax could face legal challenges.

The governor was asked about the proposal during an impromptu encounter with reporters. His initial quip:

"The Revenue Department will handle it. They'll know it when they see it."

Bredesen said he believed such a tax would be "constitutionally suspect" but that he would "be happy to sit down with Rep. Campfield and discuss it.

"I hope he will take a quick look at the Constitution before he comes by the office," said Bredesen. "I'd like it if we could put a tax on articles that are critical of the governor."

Weinberg said Campfield's proposal is "certainly a creative idea, but it does raise a lot of questions about chilling one's First Amendment rights.

"A question is, 'What is pornography?' And a broader question is, 'Who is going to decide what is pornography?' " she said.

The rate of the pornography tax also would be a concern, Weinberg said, particularly "if the goal is to make it so costly that no one can afford it."

Campfield said that is not the case. He contrasted the proposal to legislation proposed by Sen. Doug Jackson, D-Dickson, that would outlaw broadcast of advertising promoting videos deemed as obscene and harmful to minors, with "Girls Gone Wild" cited as an example.

"My bill is a tax. His (Jackson's) is a ban," said Campfield. "If somebody wants to buy 'Debbie Does Dallas,' they can pay a little extra for it."

Apparently, Utah is the only state that imposes any similar tax. That state's "sexually explicit businesses and escort services" tax, enacted in 2004, is levied at a rate of 10 percent. It covers exotic dance clubs.

Tracy O'Neill, who represents such clubs as lobbyist for the Tennessee Cabaret Association, said the Utah law had been challenged in court and has produced no revenue. She said the association's stance on Campfield's proposal would "depend on how it's written.

"I can tell you they would oppose adult entertainers being classified as sexually oriented," she said. "They don't sell sex, they sell a fantasy."

House Finance Committee Chairman Craig Fitzhugh declined to state a position on Campfield's proposal but observed that "sin taxes" are more popular than others. Fitzhugh said he has unsuccessfully sponsored a proposed tax on the lottery, a form of gambling, while others are pushing increases on tobacco and alcohol taxes.

"We could bundle up a bunch of sins and get a pretty good flow of revenue," he said.

At least one Knoxville adult-business manager is skeptical of Campfield's proposal.

Kristi Dunn, store manager of Inserection Adult Fantasy Store, 501 N. Broadway, does not think the proposed tax will be of much concern to the store's patrons.

"My question is, what good would it do?" Dunn said. "Unless it's a considerable difference, I don't think it would affect anything here."

Inserection, which Dunn said is the first adult-oriented retailer she has worked for, sells DVD movies, magazines and sexual devices that cannot be sold to minors. Minors are not allowed through the door.

Dunn said DVDs and sex toys provide most of the store's revenue. If a product costs $25 and lasts several years, she said, then a tax wouldn't deter customers.

She compared the store's stock to cigarettes, saying that a high tax does not deter use of tobacco.

"I think (lawmakers) just target stuff that is a big moneymaker," Dunn said. "You don't really hear them talk about a tax on items that aren't very popular."

More ...

Kansas Anti-Porn Activists Want 25% Porn Tax

Kansas City Star, 2/11/06 -Supporters of a proposal to place an excise tax on sexually oriented businesses said Friday that it should go even further.

They told the House Tax Committee that the tax should be 25 percent, not 10 percent, and that it should be extended to all sexually explicit merchandise, including hotel movies and magazines sold at some convenience stores.

In its current form, the bill would apply to escort services, strip clubs and adult book and video stores. It is modeled after a Utah law and a bill before the Oklahoma Legislature.

“The behavior choices of sex offenders are fueled with the merchandise available at sexually oriented businesses,” said Rep. Shari Weber, a Herington Republican and the bill’s sponsor.

In urging the higher tax rate, Phillip Cosby, an anti-pornography activist from Abilene, said 10 percent would not be enough to offset the adverse effects of pornography on society. He pointed to a bill in the U.S. Senate that would impose a 25 percent tax on the profits of Internet pornography.

“If 30 percent of the inmates in our Kansas prisons are sex offenders, I think it’s a logical place to set that (tax) percentage,” he said.

Researchers estimated last fall that a 10 percent tax would result in about $1 million in revenue. That amount would be higher, Cosby said, if pornographic products were taxed as well as adult-oriented businesses.

No one spoke Friday against the proposal, but last fall a lawyer representing three adult video and bookstores in Wichita said such a law would violate the right of free speech and the equal protection clause of the U.S. Constitution. He promised a lawsuit if the bill became law.

Rep. Kenny Wilk, a Lansing Republican and committee chairman, assigned the bill to a subcommittee to work on suggested changes and make sure all the legal aspects were analyzed. The subcommittee will be led by Rep. Lance Kinzer, an Olathe Republican, who is a lawyer.

Wilk said writing legislation to cover certain products was more difficult than applying a tax to a business.

If enacted, 40 percent of the revenue generated by the tax would be used for the treatment of sex offenders and their victims, 40 percent would go to the Kansas Department of Corrections and 20 percent would go toward Kansas Attorney General Phill Kline’s prosecution of criminals who use the Internet to procure children or teenagers for sex.

Kansas Lawmakers Want an Excise Tax on Porn

Kansas City Star, 11/10/05 - A special panel of Kansas lawmakers agreed Wednesday to introduce a bill in January that would impose a 10 percent excise tax on X-rated adult entertainment businesses.

It would be applied to strip clubs and escort services as well as X-rated video products and books sold in adult bookstores.

Rep. Kenny Wilk, a Lansing Republican and vice chairman of the Special Committee on Assessment and Taxation, said he expects a lot of legislative interest in the measure.

Rep. Shari Weber, a Herington Republican and the bill’s main supporter, went even further.

“I imagine that out of 165 legislators there would only be a handful that would not support it,” she said.

One problem, however, might be legislators who have signed a pledge to vote against any tax increase and might perceive the 10 percent tax — even though it wouldn’t be paid by everyone — as breaking that oath.

Even if the Legislature approved the bill and it was signed into law by Gov. Kathleen Sebelius, it probably would face a court challenge.

John Ivan, a Merriam lawyer representing three adult video and book stores in Wichita, told the committee last month that such a law would violate the right of free speech and the equal protection clause of the U.S. Constitution.

“Obviously, litigation would follow passage of such a law,” he said.

The Kansas proposal is modeled after a law passed last year in Utah and a proposal introduced earlier this year in Oklahoma. A lawsuit has challenged the Utah law.

One legal hurdle such a law might have to get over is whether the state could show a compelling state reason to tax these businesses differently than others.

Wilk said he believes there is a clear link between the availability of pornography and sex crimes. That was disputed by Ivan, who said last month that no reliable study had proved such a link. Critics of the measure have pointed out that not everyone who buys pornographic material commits sex offenses.

Sen. Pat Apple, a Louisburg Republican, told the committee that not everyone who drinks is an alcoholic, but that alcoholic products are taxed differently because of the harm that alcoholics cause society.

Under Wilk’s proposal, money collected from the tax would be used for the prosecution and treatment of sex offenders.

Wilk admitted that there are several parts of the bill that haven’t been worked out.

For example, it is unclear whether the tax would be applied to regular video stores that keep X-rated videos in a back room.

There also is the question of whether the tax would be applied to X-rated movies ordered over cable television systems or from hotel rooms.

Mike Zrubek, who sells some adult items at a store in Salina called Behind Closed Doors, said it would be difficult for the state to regulate and tax all the outlets that sell adult products. For example, he said, books with sexual content are sold in many convenience stores.

Zrubek said the measure is aimed at driving adult entertainment businesses out of business.

Weber denied that she had proposed the tax to force these businesses to close. However, she said they should pay for the harm caused by the products they sell.

The Kansas Department of Revenue has estimated that the tax could generate about $1 million. Weber said that estimate is being revised and predicted the next projection will be higher.

Also ...
Constitutional Concerns Arise Over Internet Porn Tax
Religious Right Objects to Online Porn Tax

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