The Texas Supreme Court unanimously ruled a $5 entrance fee for strip clubs is constitutional and does not constitute an improper restriction on nude dancing.
Lower courts had previously said the so-called "pole tax" violated the First Amendment by placing an undue burden on free expression.
But the all-Republican state supreme court said in Friday's ruling that the $5 fee is too small to be considered a burden, and that the state has a legitimate interest in curbing the "secondary effects of nude dancing when alcohol is consumed," like potential violence.
The Texas legislature passed the Sexually Oriented Business Fee Act in 2007, affecting establishments that feature nude dancing and sell alcohol. Proceeds go to sexual assault prevention programs and support low-income health insurance. Club owners sued, arguing the "sin tax" violated free expression.
According to the ruling, because the fee is not aimed specifically at nude dancing and clubs can "avoid the fee altogether simply by not allowing alcohol to be consumed," it is not unconstitutional.
Stewart Whitehead, attorney for the Texas Entertainment Association, said the strip club group may appeal to the U.S. Supreme Court as an issue of free speech, or go back to the trial court to challenge the fee as an improper occupations tax under the Texas Constitution.
Texas requires 25 percent of an occupations tax to go to public education, which does not happen with the strip club fee, Whitehead said.
According to the Texas Tribune, many strip club owners stopped paying the tax while the case worked its way through the legal system. Only 111 of the state's 176 establishments paid the fee over the last four years, generating about $14.5 million -- money that has sat in a bank during legal proceedings.
The state comptroller's office told the Tribune it will likely ask all unpaid clubs to pay up -- with interest -- in the near future.
The Associated Press contributed to this report.