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IL - Adult clubs improperly denied amusement tax exemption
The exclusion of adult entertainment cabarets from the City of Chicago's and Cook
County's amusement tax exemptions for small-venue live performances was a content-based
regulation on speech that did not serve a compelling state interest and, therefore,
violated the First Amendment of the U.S. Constitution.
Both the City and the County allowed an exemption from their respective amusement
taxes for live performances that took place in a space with a maximum capacity of
not more than 750 people (small-venue exemption), but excluded from the exemption
performances conducted at adult entertainment cabarets.
Content-Based Discrimination
Language from the City's adult use ordinance and the County's zoning ordinance,
which were incorporated into the small-venue exemptions, established that the adult
entertainment cabaret exclusions, on their face, discriminated on the basis of content.
Both ordinances defined an adult entertainment cabaret by the content of the expression
featured at the establishment, e.g., topless dancing, stripping, and entertainers
who displayed specified anatomical areas.
Consequently, one could not determine whether the adult entertainment cabaret exclusion
applied to a particular small venue without considering the content of the small
venue's featured speech or expressive conduct. The contention by the City and the
County that their tax schemes were content neutral or served content-neutral goals
was rejected.
Compelling State Interest
Because the differential tax on erotic dance was a content-based regulation on protected
expression, it was presumptively invalid and could be upheld only if it was necessary
to serve a compelling state interest. No compelling state interest was established
that necessitated the content-based adult entertainment cabaret exclusions contained
in the amusement tax schemes.
Although the City and the County had a legitimate interest in enhancing their reputations
in the fine arts, this interest did not rise to the level of a compelling state
interest that justified a content-based restriction on protected expression. Pooh-Bah
Enterprises, Inc., v. County of Cook, Illinois Appellate Court, First District,
No. 1-05-2924, December 21, 2007
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