SALT LAKE CITY—A Republican lawmaker in the Utah Legislature introduced a new bill at the start of the new legislative session, proposing a tax on online adult content used to fund age verification compliance and enforcement efforts and teen mental health, AVN confirmed today.
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." According to the legislation, such a tax would be a 7 percent levy upon the "gross receipts" of all sales of material defined as harmful to minors.
SB 73 has been introduced and not yet referred to a committee of reference. The likelihood of this bill passing the state legislature is high.
"Gross receipts" are "the total amount of consideration received for a transaction [...] without deduction for the cost of materials, labor, service, or other expenses."
The scope of that tax levy is "upon the gross receipts of all sales, distributions, memberships, subscriptions, performances, and content, amounting to material harmful to minors that is: (a) produced in this state; (b) sold in this state; (c) filmed in this state; (d) generated in this state; or (e) otherwise based in this state."
Given the broad scope of the impacted tax base, the material-harmful-to-minors tax would have to be levied on producers, content creators, platforms and others. And this tax is stacked on top of existing tax regimes, including the Utah digital sales tax and other fees.
Proceeds will be deposited into a new government account dedicated to treating teen mental health issues through the state Department of Health and Human Services. Note that Utah is one of many states that consider pornography consumption a public health crisis and buy into the disputed "pornography addiction" diagnosis.
In addition to a tax, Sen. Musselman's bill requires an annual recurring fee of $500 to be deposited into accounts controlled by the Division of Consumer Protection. That fee shall be known as a "notification fee" for companies that produce content "harmful to minors" and must file to ensure compliance with age-verification laws.
Using the fee funds, the Division of Consumer Protection will monitor compliance with age verification laws in a format similar to that used by Ofcom in the United Kingdom. Notification takes place annually, as noted. Failure to notify would result in a $1,000-per-day penalty for a regulated entity until compliance is achieved.
Utah was one of the first states to introduce statewide age verification legislation in the form of a "bounty law," allowing private parties to act on behalf of the state and sue in court for noncompliance with the age verification statute. Such a law led to Aylo, the owner of Pornhub.com, blocking IP addresses from Utah, as in other states.
Additionally, Alabama has a similar porn tax in place. The Alabama levy is 10 percent on top of existing taxes, including the state's digital goods tax and sales tax.
A bipartisan pair of state senators in Pennsylvania also announced the proposal of a measure to tax online pornography subscriptions in that state's digital space.
