A BILL to amend the Code of Virginia by adding in Chapter 17 of Title 58.1 an article numbered 13, consisting of a section numbered 58.1-1749, relating to tax on electronic distribution of material harmful to minors.
HB720 creates a new 10 percent tax on the gross receipts of commercial entities operating an “adult website” for sales, subscriptions, memberships, performances, and other content that qualifies as “material harmful to minors” and is produced, sold, filmed, generated, or otherwise based in Virginia. The bill defines adult websites by reference to online platforms with a substantial portion of harmful-to-minors content, and it incorporates existing Virginia law definitions for “material harmful to minors” and “substantial portion.”
The bill directs that revenue from the tax be deposited into the Behavioral Health and Developmental Services Trust Fund. It also assigns administration and enforcement to the Department of Taxation using procedures similar to the retail sales and use tax, and requires the Tax Commissioner to issue public implementation guidelines outside the Administrative Process Act. The measure includes a nonseverability clause, meaning if a court invalidates any provision of the first enactment, the provision is not severable.
HB720 would add a new article to Title 58.1 of the Code of Virginia establishing a targeted excise-style tax on certain online adult-content businesses with Virginia-based production or distribution activity. It would expand the state tax code to reach digital content platforms and create new administrative duties for the Department of Taxation, while directing the resulting revenue to an existing behavioral health trust fund. The bill would also affect businesses that may fall within the definition of adult websites and could raise constitutional and enforcement questions because of its content-based scope and nonseverability language.
The available legislative history suggests limited advancement and no recorded floor debate or vote count, with the bill continued to the next session in the House Finance Committee by voice vote. That procedural outcome indicates the measure did not move forward in the current session and may not have had strong consensus support. Because there are no committee transcripts or recorded votes provided, the overall sentiment can only be characterized as cautious or unresolved rather than clearly favorable or opposed.
The main points of contention are likely to be the bill’s content-based taxation of adult websites, its definition of material harmful to minors, and whether the tax is a permissible revenue measure or an impermissible burden on protected speech. Opponents would likely focus on First Amendment and due process concerns, the breadth of the “adult website” definition, and the practical difficulty of determining what content is “based in the Commonwealth.” Supporters would likely emphasize the public-health purpose of directing revenue to the Behavioral Health and Developmental Services Trust Fund and the state’s interest in regulating and taxing harmful online content.