The state Court of Appeals yesterday grappled with the question of whether an upstate adult entertainment club with exotic dancers was exempt from a sales tax because it qualified as a “dramatic or musical arts performance.” Nite Moves, near Albany, is challenging a $125,000 tax assessment levied against it on its admission charges and private dances, or “couch sales,” because it says the dances are tax-exempt under state tax law.

During yesterday’s arguments, Chief Judge Jonathan Lippman (See Profile) wondered whether the tribunal imposing the assessment was making a value judgment. “That had nothing to do with it,” Assistant Solicitor General Robert Goldfarb replied. Later, Judge Eugene Pigott Jr. (See Profile), sounding skeptical, asked Nite Moves’ attorney W. Andrew McCullough, “Can we get past that this is not the Bolshoi?” The judge went on to say the dancers were not trained and had to pay a sum of their proceeds to the proprietor in order to perform.

McCullough, of Midvale, Utah, said he was not suggesting Nite Moves was on par with the famed Russian ballet but that the state “doesn’t get to be a dance critic.” And he noted that pole dancing is being considered as an Olympic sport and said Nite Moves’ “girls would be on standing to make the team, they are that good.”

The case came to the high court after the Appellate Division, Third Department, affirmed the tax appeals tribunal’s decision to levy the tax (NYLJ, June 13, 2011). The tribunal reversed an administrative law judge who had ruled the dancers’ stripping did not make the routines “something less than choreographed performances.” The case is Matter of 677 New Loudon Corporation v. New York State Tax Appeals Tribunal, 157