SALT LAKE CITY — A Utah state senator introduced a bill on Monday that would impose a 7% tax on the gross receipts of adult websites doing business in that state, plus require adult sites to pay an annual $500 fee.
Sen. Calvin R. Musselman’s SB 73 would levy a new 7% tax on the gross receipts of “all sales, distributions, memberships, subscriptions, performances, and content amounting to material harmful to minors” that is produced, sold, filmed, generated or “otherwise based” in Utah.
The bill would also mandate that adult sites notify the state’s Division of Consumer Protection of their activities fitting the above description, and pay an annual fee of $500.
As XBIZ reported in July 2025, Alabama recently imposed a similar 10% tax. State senators in Pennsylvania recently floated the idea of doing the same, citing “successful approaches in other jurisdictions,” but have not yet introduced legislation to that effect.
Industry attorney Lawrence Walters told XBIZ that the courts have historically been reluctant to uphold taxes based on the content of protected speech.
“In one recent case, the Georgia Supreme Court upheld a 1% gross revenue tax on adult entertainment establishments in the face of a constitutional challenge,” Walters noted in reference to brick-and-mortar businesses like strip clubs. “But the court reasoned that the tax was justified not based on the entertainment content produced by the businesses, but on the alleged ‘adverse secondary effects’ of physical adult establishments, such as prostitution and child exploitation.”
Such an analysis, Walters explained, would not likely be applicable to the proposed Utah tax, since it targets the primary effects of digital media content.
“There are no recognized adverse secondary effects of online adult entertainment businesses,” Walters pointed out. “Accordingly, the Utah bill, if adopted, could be subject to a constitutional challenge as a violation of the First Amendment.”
Walters additionally observed that the bill's classification of material "sold" in Utah as "based" in Utah, essentially equating online sale to Utah residents with physical presence in the state, could create problems with the Dormant Commerce Clause, as a state-level attempt to regulate and tax interstate commerce.
Attorney Corey Silverstein told XBIZ that while he views the bill as discriminatory, he thinks it unlikely that a constitutional challenge to either the Alabama tax or Utah’s proposed tax would succeed.
"After the state-by-state pummeling of AV laws, this is only the beginning of another new trend of anti-adult and anti-free-speech laws that the entire industry needs to prepare for," Silverstein cautioned.
Revenue from the new tax would be directed to the state’s Department of Health and Human Services for use in providing mental health prevention, treatment, and recovery services and support for teens.
Revenue from the “notification fee” would be used to monitor sites’ compliance with the requirements of Utah’s age verification law, SB 287, which went into effect in January 2023 and was ultimately upheld by a U.S. court of appeals after the Free Speech Coalition challenged the law.
