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SALT LAKE CITY — A bill that would tax adult websites and hold them liable if minors circumvent geolocation safeguards has passed the Utah Legislature and now heads to the desk of Gov. Spencer Cox for signature or veto.
In addition to updating investigation and enforcement rules for age verification in Utah, SB 73 would impose an excise tax of 2% on adult sites operating in the state. The tax would apply to transactions involving “access to digital images, digital audio-visual works, digital audio works, digital books, or gaming services,” including streaming or subscription access to those works and services.
Industry attorneys have cited several potential legal hurdles the tax could face if enacted. However, Alabama has already adopted a similar measure imposing a 10% tax on adult content, while lawmakers in Virginia and Pennsylvaniahave introduced proposals exploring similar policies.
Revenue generated by the proposed Utah tax would be directed to a state account intended to fund “(a) mental health treatment programs for minors affected by material harmful to minors; (b) educational programs for parents, guardians, educators, and minors on the mental health risks associated with material harmful to minors; (c) early prevention and intervention programs for minors at risk of mental health harm from material harmful to minors; and (d) research and public awareness campaigns addressing mental health harm to minors caused by material harmful to minors.”
VPN Requirements
The legislation also includes a provision stating: “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.”
In December, officials in Indiana filed a lawsuit against Aylo, alleging that the company and its affiliates violated the state’s age-verification law by failing to prevent access by users employing virtual private networks to bypass geolocation controls. The VPN language in SB 73 could similarly affect enforcement of Utah’s age-verification law, which took effect in January 2023.
If Cox signs the bill, it would take effect Oct. 1.
