Judge strikes down Georgia’s child sex trafficking tax

Georgia’s tax on adult entertainment establishments to bankroll a fund that helps sexually exploited children is unconstitutional, a Fulton County judge ruled on Thursday.

Georgia voters approved the tax in a 2016 constitutional amendment. It requires that adult entertainment businesses pay $5,000 or 1 percent of their gross revenue, whichever is more, to finance the Safe Harbor for Sexually Exploited Children Fund. The collections pay for the care, rehabilitation and social services of victims.

In 2017, an organization of adult entertainment establishments with about 16 members filed suit seeking to strike down the law. As a result, the state Department of Revenue delayed enforcing the tax until the lawsuit was resolved.

Attorneys for the clubs had argued that no one younger than 18 is allowed to work at an adult entertainment business and no one under the age of 21 is allowed to enter. Moreover, most child sex trafficking is done through the internet, they argued.

State attorneys countered that they were not contending there is rampant sex trafficking inside Georgia's strip clubs. Instead, they argued, the establishments were places where children come into contact with sex traffickers.

In her 11-page order, Superior Court Judge Constance Russell said there is no dispute that protecting sexually exploited minors is a compelling state interest. The state can also enact legislation to further that objective, she said.

But the Legislature cannot write the law in such a way the tax could be imposed on the unintended, the judge said.

Russell focused on one section of the law that says the tax can be collected from a business that either charges a fee or requires a purchase from patrons who can view “persons exhibiting … lingerie or similar undergarments.”

“(This) could easily include entirely legitimate activity unconnected with either adult entertainment as it is commonly understood or child sex exploitation,” Russell wrote. This includes “trunk shows,” where clothing manufacturers or retailers display clothes for sale at hotels and other places of business, she said.

Such are the dangers of vague, unconstitutional laws, Russell said. “They may trap the innocent by not providing fair warning to persons of ordinary intelligence.”

The state Attorney General’s Office will appeal Russell’s decision, spokeswoman Katie Byrd said.

The Association of Club Executives, which brought the lawsuit, appreciates the harm caused by sex trafficking, its lawyer Gary Freed, said. And the group “vigilantly battles the evils of sex trafficking and coordinates with law enforcement regularly."

The lawsuit was filed “because the law wrongly targeted its members and was too vague to be fairly applied,” Freed said. “This is a win for our constitution and the rule of law.”