ALBANY — The state has a leg up on the strip-club industry.

In a 4-3 vote, the Court of Appeals ruled Tuesday that an all-nude Latham night spot must pay state sales tax — a decision that could have wide implications for topless joints across the Empire State.

The high court rejected a heated argument from the club's attorney that strip club pole dancers are choreographic performers just like ballet dancers and deserve the same exemptions from taxes.

The Nite Moves strip club on Route 9 wanted exemption on paying taxes on dances and admission because the state allows the exceptions for "dramatic or musical arts performances."

And three judges — one of whom described himself as "stuffy" — agreed with Nite Moves' arguments, suggesting the state was differentiating between "highbrow" and "lowbrow" dancing.

But in the end, one judge too many found a difference between the work of Mikhail Baryshnikov and the character that actress Demi Moore played in the widely panned 1996 film "Striptease."

The Court of Appeals decision upheld a ruling from the Appellate Division of state Supreme Court in favor of the state Tax Appeals Tribunal over the club, also known as the 677 New Loudon Corporation. It is owned by Stephen Dick Jr. of Menands.

"Clearly, it is not irrational for the Tax Tribunal to decline to extend a tax exemption to every act that declares itself a 'dance performance,'" the justices wrote in its majority decision. "If ice shows presenting pairs ice dancing performances, with intricately choreographed dance moves precisely arranged to musical compositions, were not viewed by the Legislature as 'dance' entitled a tax exemption, surely it was not irrational for the Tax Tribunal to conclude that a club presenting performances by women gyrating on a pole to music, however artistic or athletic their practiced moves are, was also not a qualifying performance entitled to exempt status."

Supporting the state were Senior Associate Judge Judges Carmen Beauchamp Ciparick and Associate Judges Victoria Graffeo, Eugene Pigott and Theodore Jones. Dissenting were Chief Judge Jonathan Lippman and Associate Judges Susan Read and Robert Smith, who wrote the dissenting opinion.

"The ruling of the Tax Appeals Tribunal, which the majority upholds, makes a distinction between highbrow dance and lowbrow dance that is not to be found in the governing statute and raises significant constitutional problems," Smith wrote.

He argued the issue was whether the charges the state had sought to collect were for a "choreographic performance," but that the state Department of Taxation and Finance's own regulations uses the word "choreographic" as a synonym for dance.

Smith stated the only unanswered question was whether the club's admission charges sought by the state were for "paid for" dance performances.

"There is not the slightest doubt that they were," Smith wrote.

Smith stated that the Tax Tribunal wrongly decided the strip dancers were athletes and not artists.

"The Tribunal seems to have missed the point that 'ranking,' either of gymnasts or dancers, is not the function of a tax collector," Smith stated.

He supported Nite Moves — while making it clear he is not fan of nudie bars.

"Like the majority and the Tribunal, I find this particular form of dance unedifying — indeed, I am stuffy enough to find it distasteful," Smith stated. "Perhaps for similar reasons, I do not read Hustler magazine; I would rather read the New Yorker. I would be appalled, however, if the state were to exact from Hustler a tax that the New Yorker did not have to pay, on the ground that what appears in Hustler is insufficiently 'cultural

and artistic.' That sort of discrimination on the basis of content would surely be unconstitutional. It is not

clear to me why the discrimination that the majority approves in this case stands on any firmer constitutional footing."

READ THE FULL DECISION AND COMMENT AT THE CAPITOL CONFIDENTIAL BLOG.

Dick, who owns the club with a Los Angeles-based business partner, Stuart Cadwell, said he expected the high court to rule in his favor in a split decision. Dick's club still owes a tax bill he estimated last month to be around $400,000.

"It was clear to me that Judge Smith understood the case better than the others and his dissenting argument spells out everything that we had voices in our opinions as well," Dick said.

He said he is considering taking the issue to the federal level given the close vote and constitutional implications, but needed to speak first with his attorney. The club's attorney, W. Andrew McCullough, told the Court of Appeals last month that strip pole-dancing is not only deserving of tax exemption based on the videos he has watched, but that it is also under consideration to become an Olympic sport.

"If it's under consideration as an Olympic sport, these girls certainly — the ones that you would see on these videos — would be in standing to make the team," the attorney said at the time. "They're that good!"