The WAZ media group reported on Thursday that other municipalities in the large western state of North Rhine-Westphalia were eyeing such a tax, and that the state's Interior Minister, Ingo Wolf, was favourable to the idea.
Big cities such as Essen, Duisburg and Dortmund, were looking into the plan and the ministry already has proposals from Oberhausen, Dorsten, Gladbeck and Sprockhövel.
Cologne made headlines in 2004 as one of the first cities in the world to introduce such a “sex tax.”
There, the levy is simple: it is charged on establishments that operate legal prostitution, either on individual sex workers at a rate of €150 tax per month, or on the size of the establishment, at €3 per 10 square metres of area.
After a court recently banned the tax during certain months of the year in response to a challenge from sex club owners, Cologne authorities have been looking to Interior Minister Wolf to create a law permitting the tax to be raised on brothels, swingers' clubs and red light bars.
Political sources in Cologne told WAZ Wolf was thought to back the sex tax. “The political decision has been taken,” one source said.
Jürgen Schlaucher, the Finance Ministry official who deals with the revenue, described it rather clinically as “a tax like any other.”
It remains legally controversial, however, whether the sex tax is a variant of the long-practised entertainment tax or should be assessed as an entirely new one. For a new tax, a city municipality needs the green light from the state government.
In Dortmund, there is debate about a tax for street prostitution – possibly by charging sex workers themselves €15 per working day or by somehow levying a charge on clients who frequent streets where sex workers operate.
Not everyone is impressed by the idea. The sex tax is paid as a so-called “miscellaneous tax” along with pleasure taxes and dog licenses, which put €590 million in cities' coffers in 2008.
“You can't restructure budgets with miscellaneous taxes,” said Daniela Schönwälder, spokeswoman of the Association of German Cities and Towns.
Helmut Dedy of the German Association of Towns and Municipalities, said the sex tax was negligible for the cities' bottom lines.
The pro-business Free Democrats, to which Wolf belongs, are also sceptical, with North Rhine-Westphalia parliamentary leader Gerhard Papke saying a sex tax was “no way to fix municipal finances.”
He said every city would have to decide for itself but added: “I have my doubts whether a municipality does its image any favours if they are connected nationally with such an issue.”