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Sexually Oriented Business Fee
Frequently Asked Questions


What is the Sexually Oriented Business Fee (SOBF)?
The law creating the SOBF became effective on January 1, 2008, and imposes a $5.00 fee on each entry by each customer admitted to businesses that provide live nude entertainment or live nude performances for an audience of two or more individuals, and authorize on-premises consumption of alcoholic beverages, regardless of whether the businesses are required to hold a license or permit under the Alcoholic Beverage Code.
Where can I find a copy of the SOBF law?
The controlling statutes are located in the Texas Business & Commerce Code §47.051 - 47.056 (PDF, 59.55KB).
How do I get set up to pay the SOBF?
You are required to complete and submit to the Comptroller's office a Texas sexually oriented business fee questionnaire (PDF, 130.59KB).
When is the SOBF report due?
You must file a report and remit payment of the fee by the 20th day of the month following each calendar quarter. If the due date falls on a Saturday, Sunday, or legal holiday, the next working day is the due date.
Where can I find a copy of the SOBF Report?
The SOBF report can be found on this Web site.
What records should I create and keep to track and validate my payments of the SOBF?
You are required to maintain adequate records, statements, books and accounts that allow you to calculate and the Comptroller to verify the SOBF for which you are liable.

Specifically, you must record daily the number of customers admitted to your business. The manner in which you record the number of customers admitted to your business may be written, stored on data processing equipment or may be in any form that the comptroller may readily examine.

Can I collect the fee from my customers?
Yes. The law gives you the discretion to determine how you will derive the money to pay the SOBF. However, note that all door and cover charges, including a pass through of the sexually oriented business fee directly to customers as part of the admission, are subject to sales tax, so if you collect the SOBF from your customers you must also collect and remit sales tax on the fee. A charge not clearly identified as reimbursement of the fee is considered a tax collected from the customer and these amounts must be remitted to the comptroller in addition to the $5.00 entry fee.
How do I calculate the amount of fee due by a business for a customer that has more than one entry on the same business day at the same sexually oriented business location?
The amount of fee due by a sexually oriented business for more than one entry by the same customer on the same business day at the same location is considered to be one entry and the fee amount due from the business for the entry is $5.00. A business day begins when the business opens and continues until the close of business. See Rule 3.722.
What if I occasionally host an event that meets the definition of a sexually oriented business?
A business does not have to hold itself out as engaged full time in the activities of a sexually oriented business to be liable for the fee. If you host even one event that meets the definition of a sexually oriented business, you are responsible for the fee based upon attendance during the specific event triggering the assessment. You are required to complete and submit to the Comptroller's office a Texas sexually oriented business fee questionnaire (PDF, 130.59KB) and remit the SOBF. The business will be set up to file the quarterly report and pay the fee.
What if I operate a business where the consumption of alcoholic beverages is allowed and live nude performances take place only in private rooms where only one customer at a time is allowed to view the performance?
This type of business is not liable for the SOBF if the business does not provide live nude entertainment for an audience of two or more individuals.
What happens to the revenue generated by the SOBF?
By law the first $25 million in revenue generated by the fee is dedicated to the Sexual Assault Program Fund to cover the costs of programs that relate to sexual assault prevention, intervention and research provided by state, local and nonprofit agencies. Any excess revenue is deposited to the Texas Health Opportunity Pool and used only to provide health benefits coverage premium payment assistance to low-income persons.
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