The Freedom and Privacy Project - National Coalition for Sexual Freedom

This is a fee that must be paid for every customer by businesses that provide live nude entertainment, or live nude performances as defined by the jurisdiction, and authorize on premises consumption of alcoholic beverages regardless of whether the business is required to hold a license or permit under the Alcoholic Beverage Code. A SOB tax can be applied retroactively for every customer who has entered if your club is labeled as an SOB by the authorities.

In United States law, a sexually oriented business (S.O.B.[1]) is a business that is part of the sex industry, such as sites of erotic performance and erotic paraphernalia stores. Often regulations of SOBs enter law as part of zoning regulations by jurisdictions when trying to maintain the character of a particular community and discourage elements of society that may be considered harmful for their connection to the sex industry.[2] Though many regulations of SOBs arguably violate First Amendment rights in the United States, lawmakers will use the secondary effects doctrine—in which restrictions of First Amendment rights are legal if the restrictions can prevent harm to the larger community—to justify regulation of SOBs.

What is the Live Sex Act Business Code?

Also known as the Phoenix Ordinance. On December 9, 1998, the Phoenix City Council unanimously passed an ordinance which made it a nuisance crime to own or operate a swingers club, resulting in fines and closure. The Scottsdale-based National Family Legal Foundation, a conservative Christian organization, helped Phoenix city attorneys draft the law.

Since then, a number of other cities have passed their own version. In August 2019, the City Council in Ft. Wayne, Indiana, considered a Live Sex Act Businesses ordinance to shut down The Champagne Club. City Council Member John Crawford argued successfully against it because it was based on morality, stating, “Based on all the evidence and data I’ve found on this club, I don’t think they are hurting anyone and the citizens are living their lives as they see fit.”

About Live Entertainment

Even if you don’t pay performers to dance on a pole, your club may be considered to be “providing” live entertainment if you are providing a venue where people can see others have sex. “Watching” is the hallmark of live entertainment, so allowing people to watch someone have sex has been used to label clubs as a Sexually Oriented Business. Clubs have gotten around this by creating cubicles with doors that can be closed. That way any sexual activity is technically taking place in private, though doors can be cracked or left unlocked to indicate others are welcome inside. Notice should be given that there is no expectation that any door you close will remain closed, and that staff can enter to ensure safety.

What are the Obscenity Laws?

Obscenity laws prohibiting sexual activity in the view of the public. The municipality will see you as “public” if you don’t have a “barrier to entry”. A barrier to entry must be ‘real’. If someone can pay and walk in, that isn’t a barrier to entry. There is some well-defined case law about this: Eagle v Chicago, Power Exchange v California. In many jurisdictions, obscenity laws are invoked when someone goes to an authority and says, “I am offended”, and that is enough for probable cause. Then you are on the defense.

What are Adverse Secondary Effects?

These studies are used to justify closing sexually oriented businesses, or when no correlation to crime or lowered property values is shown, to allow clubs to remain open.

In Los Angeles v. Alameda Books (2002) the court found that evidence that was shoddy or not derived from a specific area does not justify regulation, and the ruling places the burden of proof on the government for collecting “substantial” data to justify the claims of adverse secondary effects.

How NCSF Can Help You

NCSF will help guide you through this process. Please email NCSFreedom@NCSFreedom.org

Please reach out early in the process. The more time we have, the more effective we can be. If you've hired an attorney, connect us, please.