May 19, 2026
Cleveland City Council approved a tax break for the city’s small, independent music venues and comedy clubs as the local entertainment industry continues recovering from the COVID-19 pandemic. The new law eliminates the city’s 4% admissions tax for locally operated venues with capacities under 750 people, while venues under 150 people had already been exempt.
Councilmember Kris Harsh, who represents Old Brooklyn, said the measure would help venues recover from pandemic-related losses and adapt to changing trends in alcohol consumption among younger patrons. Joined at Monday’s finance meeting by Happy Dog owner Sean Watterson and Economic Development Director Tom McNair, Harsh described the legislation as a low-cost way to support Cleveland’s arts and entertainment scene.
Debate during the meeting shifted, however, to businesses excluded from the tax break — specifically strip clubs.
Councilman Richard Starr argued that certain business owners were being unfairly singled out because of the type of entertainment they provide.
An amendment to the legislation specifically excluded establishments featuring nude, semi-nude or topless dancing and other adult-oriented live entertainment. Only two venues — Larry Flynt’s Hustler Club and the Gold Horse — would have qualified under the 750-seat threshold. Harsh noted that many strip clubs already avoid the admissions tax because their capacities fall below the existing 150-person exemption.
Several council members questioned the exclusion. Councilmember Jasmin Santana strongly opposed including strip clubs in the tax break, citing concerns about links between strip clubs and human trafficking.
The amendment excluding strip clubs ultimately passed, with Starr casting the only opposing vote. Council later approved the broader tax-break legislation.
Watterson said the measure will save the Happy Dog between $4,000 and $5,000 annually. He emphasized the role independent venues play in supporting neighborhood culture and local economies, alongside venues such as the Beachland Ballroom and The Foundry.
Cleveland first enacted an admissions tax in the 1970s at 6%, later increasing it to 8% in 1995 to help finance construction of the city-owned Browns stadium. In 2012, the city revised the structure so venues under 150 people were exempt and those with capacities between 150 and 750 paid a reduced 4% rate.
According to Harsh, the new legislation will reduce city revenue by approximately $341,000, about 1.1% of projected 2026 admissions-tax revenue. He noted, one Cleveland Cavaliers' playoff game brought in more revenue then is lost.
A study by the National Independent Venue Association found Cleveland’s independent venues generate $1.17 billion in annual economic activity in Cuyahoga County, though roughly three-quarters of those venues operated at a loss in 2024.