SALT LAKE CITY — The Utah state Senate has passed a bill that would impose a 2% tax on the revenues of adult websites doing business in that state, and make sites liable if Utah minors use VPNs to circumvent geolocation.
As XBIZ reported in January, the bill as originally introduced would have imposed a 7% tax on the gross receipts of adult websites doing business in that state. It would also have required adult sites to notify the state’s Division of Consumer Protection of their in-state activities and pay an annual fee of $500. The bill has since undergone revisions, however.
As currently amended, SB 73 is now a broader bill covering various activities of the Division of Consumer Protection and other government entities. It incorporates some provisions from the original version, and amends or removes others — including the notification and annual fee requirements.
Rather than 7%, the state Senate-approved version would now impose an excise tax of 2% on adult sites operating in Utah. The new tax would apply to transactions for “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 a number of potential legal hurdles such a tax might face. However, as XBIZ reported in July 2025, Alabama recently imposed a similar 10% tax. Meanwhile, Virginia legislators are also considering such a measure, and state senators in Pennsylvania have floated the idea of doing the same.
Revenue from the proposed new tax in Utah would be directed to a state account for funding “(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 Added
As amended, Utah’s SB 73 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.”
The bill would additionally prohibit adult websites from facilitating or encouraging the use of a VPN, proxy server or other means to circumvent age verification requirements, “including by providing: (a) instructions on how to use a virtual private network or proxy server to access the website; or (b) means for individuals in this state to circumvent geofencing or blocking.”
A common criticism of state AV bills is that, since they apply only in a particular state, users can easily use virtual private networks (VPNs) to avoid being singled out for age verification. As XBIZ has reported, media attention around the widespread use of VPNs to circumvent age verification has inspired efforts to close that practical loophole.
For instance, West Virginia’s SB 498 would mandate that “No online platform, website, or digital entity may allow users to bypass age verification requirements through VPNs, proxy services, or other anonymizing technologies.” That bill is awaiting its first committee hearing.
Meanwhile, the state of Indiana is suing Aylo, alleging that the company and its affiliates have violated the state’s AV law by failing to prevent access by users using virtual private networks to avoid geolocation. Indiana’s law does not mention VPNs, but the suit asserts that Aylo is in violation “because Indiana residents, including minors, can still easily access the Defendants’ websites with a VPN IP or proxy address from another jurisdiction or through the use of location spoofing software.”
The new VPN language in SB 73 could impact enforcement of Utah’s age verification law, which went into effect in January 2023.
The bill will next be heard in Utah's House Revenue and Taxation Committee. If ultimately enacted, the VPN provisions of SB 73 would take effect May 6. The new tax provisions would take effect Oct. 1.
