Online Add-on Transaction Fee Youth Service Enterprise
HB1418 creates two new government-owned enterprises in Colorado to collect fees from certain online gaming and social media platforms that offer add-on transactions to youth users. One enterprise, housed in the Behavioral Health Administration, would use fee revenue to fund youth mental health services, including peer navigator grants, crisis resolution team services, and the existing youth mental health services program. The other enterprise, housed in the Department of Education, would use fee revenue to support out-of-school time programming and enforcement of educational rights for children.
The bill defines “covered platforms” broadly to include entities doing business in Colorado that generate revenue from add-on transactions in online gaming services, products, or features and derive a majority of annual revenue from those services. Beginning January 1, 2027, covered platforms must collect a 5% fee on each add-on transaction and remit it to the Department of Revenue, which then transfers the money to the appropriate enterprise fund. The bill also requires prices for certain youth-accessible gaming purchases to be listed in U.S. dollars and treats violations as deceptive trade practices. It further expands the youth mental health services program by increasing reimbursable sessions from three to six and shifts administration of that program to the new enterprise beginning in 2028.
The bill would amend Colorado law by adding a new deceptive trade practice provision, creating two new enterprise funds, and revising existing statutes governing youth mental health services and out-of-school time grants. It also establishes governance structures, reporting requirements, public meeting and open records obligations, spending caps for administrative costs, and appropriations for implementation. The measure is structured to fit within Colorado’s enterprise revenue framework and expressly states that the fee is not a tax for constitutional purposes.
Overall sentiment in the recorded votes was mixed but generally supportive enough to advance the bill through both chambers. Several committee votes were unanimous on amendments, while final floor votes were closer, including a tied Senate third reading vote and narrower House and Senate committee margins earlier in the process. The final House concurrence votes on Senate amendments were also divided, indicating meaningful support but not broad consensus.
The main points of contention appear to be the bill’s fee structure, its effect on online gaming and digital platform businesses, and whether the charge is properly characterized as a fee rather than a tax. Supporters framed the measure as a youth protection and mental health funding mechanism, while opponents likely focused on the cost burden on platforms and consumers, the breadth of the covered-platform definition, and the policy choice to finance youth services through add-on transaction charges tied to gaming and social media activity.
HB1418 would add new statutory authority for Colorado to collect a 5% fee on add-on transactions made through certain online gaming platforms used by youth, with revenue dedicated to youth mental health and youth programming purposes. It creates the Youth Mental Health Services Access Enterprise in the Behavioral Health Administration and the Youth Programming and Protections Enterprise in the Department of Education, along with associated funds, boards, reporting duties, and spending limits. The bill also amends the youth mental health services program to increase covered sessions and transfer program administration to the new enterprise in 2028, and it adds a deceptive trade practice rule requiring youth-accessible gaming prices to be listed in U.S. dollars.
The bill appears to have received substantial support from many legislators, as shown by repeated committee approvals and passage of amendments, but it also drew enough opposition to produce close votes at several stages. The House ultimately passed the bill and concurred in Senate amendments, but the Senate third reading vote was tied, suggesting the proposal was politically divisive. The overall tone of the available voting history suggests support for youth mental health and programming funding, tempered by concern over the financing mechanism and regulatory reach.
The most notable contention is the bill’s reliance on fees imposed on online gaming and social media platforms, especially platforms that monetize youth engagement through add-on transactions. Critics are likely concerned about whether the charge functions like a tax, whether it will be passed on to consumers, and whether the definition of covered platforms is too broad or difficult to administer. Another area of debate is the policy tradeoff between funding youth services and imposing new obligations on digital businesses, while supporters emphasize the need for dedicated revenue for mental health, crisis response, out-of-school time programming, and educational rights enforcement.