Opinion ID: 2265911
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: ¶ 3 The Tax creates a mechanism for taxing businesses in which individuals perform services while nude or partially nude. Specifically, [a] tax is imposed on a sexually explicit business equal to 10% of amounts paid to or charged by the sexually explicit business for . . . (a) an admission fee; (b) a user fee; (c) a retail sale of tangible personal property made within the state; (d) a sale of . . . food . . .; (e) a sale of beverage; and (f) any service. [2] A sexually explicit business is defined as any business where a nude or partially denuded employee or contractor performs any service: (a) personally on the premises of the sexually explicit business; (b) during at least 30 consecutive or nonconsecutive days within a calendar year and is paid or compensated for such service. [3] To be nude or partially denuded means that any of the following [is] less than completely and opaquely covered: (a) genitals; (b) the pubic region; or (c) a female breast below a point immediately above the top of the areola. [4] ¶ 4 The statute also provides for a tax on escort services. An escort service is any person who furnishes or arranges for an escort to accompany another individual for: (a) companionship; and [for:] (b) (i) a salary; (ii) a fee; (iii) a commission; (iv) hire; (v) profit; or (vi) any amount similar to an amount listed in this Subsection 2(b). [5] An escort is any individual who is available to the public for the purpose of accompanying another individual for compensated companionship. [6] [A] tax is imposed on an escort service equal to 10% of amounts paid or charged by the escort service for any transaction that involves providing an escort to another individual. [7] ¶ 5 The proceeds from the Tax are to be split between the Department of Corrections, Adult Probation and Parole Division, and the Attorney General's office. [8] Specifically, portions of the proceeds are dedicated to provide treatment services to individuals convicted of sex offenses, including indigent or nonworking adults, other individuals who are subject to Adult Probation and Parole jurisdiction, and juveniles. [9] A portion of the fund is also designated for a task force that investigates and prosecutes individuals who use the Internet to commit crimes against children. [10] ¶ 6 Plaintiffs, a group of escort service agencies and erotic dancing clubs, initiated this action against the Utah State Tax Commission (the Commission) in 2004 by filing a complaint seeking (1) a declaratory judgment that the Tax was an unconstitutional burden on both their right to freedom of speech guaranteed by the First Amendment and their right to equal protection guaranteed by the Fourteenth Amendment; and (2) a permanent injunction against enforcement and collection of the Tax. Both parties moved for summary judgment. The district court granted the Commission's motion for summary judgment while denying Plaintiffs' motion. Specifically, the district court held that the Tax did not violate Plaintiffs' First Amendment rights because it was constitutional under United States v. O'Brien. [11] The court also found that the Tax did not violate the Equal Protection Clause of the Fourteenth Amendment because the Tax was rationally related to the legitimate government interest in providing treatment for sex offenders. [12] ¶ 7 Plaintiffs timely appealed the district court's grant of summary judgment to this court. We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(j) (2008).