SALT LAKE CITY—The Utah Legislature on Monday advanced a bill through the state Senate proposing a tax on online adult content used to fund age verification compliance and enforcement efforts and teen mental health response. Now, the proposal advances to the House of Representatives with amendments to the original measure.
Republican state Sen. Calvin R. Musselman, hailing from the small town of West Haven, is the primary sponsor of Senate Bill (SB) 73, which proposes a "material harmful to minors tax." An original version of the bill featured a 7 percent levy on gross income from the sale of material defined as harmful to minors. Now it's 2 percent.
SB 73 is currently pending before the House Revenue and Taxation Committee, where it is likely to advance with GOP endorsement.
The bill also prohibits the use of virtual private networks (VPNs) to circumvent laws related to age verification. The addition of VPNs to the proposal is characteristic of a Republican legislative trend to restrict or ban the use of proxy tech.
"An individual is considered to be accessing the website from this state if the individual is actually located in the state, regardless of whether the individual is using a virtual private network, proxy server, or other means to disguise or misrepresent the individual's geographic location to make it appear that the individual is accessing a website from a location outside this state," the bill now states. The bill's new language also intends to block communications about using VPNs. For example, it outlines a clear definition of regulated platforms, platforms that are known as a "covered entity," that are required to verify the age of their users and are not permitted to post messaging about using a virtual private network to circumvent age-checks, content blocks and other restrictive measures that derive from the AV statutes.
Under the proposal, the bill specifically defines a "covered entity" subject to the tax as a "commercial entity that is required to perform age verification." Such a definition of an entity ultimately covers platforms across a variety of site categories, including pay sites, clip sites, tube sites and other services.
A "covered transaction" relates to amounts "paid to or charged a covered entity for access to digital images, digital audio-visual works, digital audio works, digital books, or gaming services." For example, NSFW games produced for the Aylo-owned mobile gaming marketplace Nutaku would be subject to the 2 percent tax levy if passed.
The measure is likely to pass, given Utah's recent regulatory interventions on the adult entertainment industry. Utah was one of the first states to be blocked by Aylo, the parent company of Pornhub and popular membership sites including Brazzers, TransAngels, Men.com, SeanCody.com, and many more—all blocked.
Republican Gov. Spencer Cox also endorsed measures to limit access to pornography, and endorsed a settlement with the Federal Trade Commission and his state's consumer protection agency with Aylo. Considering this, the bill is a measure to extract revenue in a new tax regime that presents consuming pornography as a "sin."
