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Senate considers tax on Internet pornography

By Eric J. Sinrod
August 31, 2005
USAToday.com

Senate considers tax on Internet pornography

By Eric J. Sinrod
August 31, 2005
USAToday.com

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A bill designed to protect children from Internet pornography and to support law enforcement and other efforts to combat Internet and pornography-related crimes against children has been introduced in the United States Senate. S 1507, which sets forth the proposed Internet and Safety and Child Protection Act of 2005, is sponsored by Senator Blanche Lincoln (AR).

The proposed Act has several pertinent features. First, it sets forth a contemplated age verification requirement. Namely, an operator of a regulated pornographic Web site would need to verify that any user attempting to access its site is 18 years of age or older using software that is certified for that purpose. This age requirement would be required to happen before the display of any pornographic material (including any free content that may otherwise be available prior to the purchase of a subscription or product).

Next, there would be a credit card requirement. Specifically, a bank, credit card company third-party merchant, Internet payment service provider or business that performs financial transactions for a regulated pornographic Web site would only be allowed to process age-verified Internet credit card transactions.

There also would be a commission requirement. By this, the Federal Trade Commission would require each regulated pornographic Web site to use appropriate age-screening software and to use such software correctly and consistently through methods like periodic tests attempting to access the Web site without appropriate age verifications.

The Federal Trade Commission would be empowered to treat violations of this Act as unfair or deceptive acts or practices under the Federal Trade Commission Act.

Perhaps most controversial is the proposed imposition of a federal tax. The bill provides that there would be "imposed on amounts charged by a regulated pornographic Web site for individuals to receive the display or distribution of pornography through the Internet a tax equal to 25% of the amounts so charged." This tax would be paid by the operator of the regulated pornographic Web site receiving payment.

This last tax feature has raised concerns about constitutional guarantees of freedom of expression. Arguments have been made against banning certain categories of expression or selectively imposing taxes on specific types of speech.

S. 1507 has been referred to the Senate committee, and time will tell where it goes next.

Eric Sinrod is a partner in the San Francisco office of Duane Morris (www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. His column appears Wednesdays at USATODAY.com. His Web site is www.sinrodlaw.com, and he can be reached at . To receive a weekly e-mail link to Mr. Sinrod's columns, please send an e-mail with the word Subscribe in the subject line.

Disclaimer: This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.

Reprinted here with permission from USAToday.com.