An organization representing adult entertainment clubs across Georgia, including those in DeKalb and Fulton counties, has sued two state leaders, claiming a new tax on the clubs is unconstitutional.

The Georgia Association of Club Executives, which represents Mardi Gras in Sandy Springs, Oasis Goodtime Emporium in Doraville and the Pink Pony in Brookhaven, filed a lawsuit Nov. 10 in Fulton County Superior Court against Attorney General Chris Carr and Revenue Commissioner Lynne Riley.

The new law, which takes effect Jan. 1, will allow the state to tax each adult entertainment business, including strip clubs, an annual fee of $5,000 or 1 percent of revenue, whichever is higher, to support the Safe Harbor for Sexually Exploited Children Fund, which goes to programs to stop sex trafficking in Georgia. In a Nov. 27 news release, the association claims the law is unconstitutional because the clubs have nothing to do with child sex trafficking, are already highly regulated and don’t allow anyone under 21 to enter.

“GA-ACE members believe that this law stigmatizes the industry with the unfounded accusation of child sex trafficking,” Jill Chambers, the association’s executive director, said. “Children do not congregate at adult-themed nightclubs. Child predators and those who seek to exploit minors go where children congregate – not to ADULT nightclubs. GA-ACE members are trained to recognize possible sex trafficking victims and report them directly to federal law enforcement.”

The attorney general’s and revenue commissioner’s offices declined to comment because the litigation is still pending, their spokespersons said.

The new tax was overwhelmingly approved by the state’s voters (83 percent) in the November 2016 general election as a constitutional amendment/referendum. It is based on Senate Bill 8, which was approved by the General Assembly and signed by the governor in 2016.

According to an association news release which cited SB 8, the funds generated by the new law will not be funneled to law enforcement. Instead, the release stated, they will go to fund “a ‘commission’ of state bureaucrats and to ‘employ professional, technical and clerical personnel’ but will only ‘consider’ ‘awareness and prevention’ services for exploited children.”

To offer proof the law is unconstitutional, Chambers, a former state representative, emailed the Neighbor three videos from Georgia House Juvenile Justice Committee hearings in 2015. In the first one, Georgia Bureau of Investigation Director Vernon Keenan speaks to the committee regarding sex trafficking, saying the GBI has not linked sex trafficking to adult entertainment clubs, focusing more on websites that advertise “escorts.”

In the second video, District 14 Rep. Christian Coomer, R-Cartersville, told District 45 State Sen. Renee Unterman, R-Buford, who co-sponsored SB 8, he was concerned about a possible lack of legislative oversight regarding how the tax would be distributed to the state once collected. Coomer also said he was worried about the group overseeing the tax being mostly appointees of the governor.

In the third video, District 82 State Rep. Mary Margaret Oliver, D-Decatur, said to establish a tax on the clubs, “You must have a nexus in general between adult entertainment and sexual criminality. This includes sexual crimes like prostitution, certainly that overlap with prostitution and children. You do not have to prove, in order to have a constitutionally permissible fee on a strip club, that there was a specific girl under age that was trafficked by a specific adult entertainment industry.”

Chambers also said the association has its own initiative, Club Owners Against Sex Trafficking that combats the issue by recognizing and giving aid to possible victims and working with law enforcement. The news release stated 60 people were arrested in October following an FBI investigation into child sex trafficking, and none of the suspects were connected to the state’s clubs.

The lawsuit also focuses on legal language introduced by Unterman and District 42 State Sen. Elena Parent, D-Atlanta, which claimed these clubs are places where sexual predators find children. Unterman did not return an email seeking comment, but Parent said “there is a nexus between child sex trafficking and the commercial sex businesses (including adult entertainment clubs).”

“There’s testimony to that effect in the study committee,” she said of a hearing on the issue that likely took place in 2015. “I believe the lawsuit is not surprising and the courts will weigh in. Do I believe it’s unconstitutional? No, because there’s a nexus there. But I think it will be settled in the courts.”

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