MONTGOMERY, Ala. — The Alabama Department of Revenue has begun sending notices to adult site operators about a new 10% tax on their revenues, set to be enforced starting Sept. 1.
In April 2024, Alabama enacted HB 164. The bill’s age verification requirements took effect in October 2024, prompting some adult sites to block access in the state.
The law also imposes a 10% tax on adult websites’ gross receipts. With that provision set to take effect Sept. 1, the Department of Revenue has begun contacting adult site operators.
One such notice, which XBIZ has seen, includes the following information:
In accordance with Act 2024-97, effective September 1, 2025, there is a tax of 10 percent levied on the gross receipts of any commercial entity operating an adult website. The tax is due on the gross receipts of all sales, distributions, memberships, subscriptions, performances and all other content amounting to material harmful to minors that is produced, sold, filmed, generated, or otherwise based in this state.
The entity should register for a Material Harmful to Minors (MHM) tax account through My Alabama Taxes. The tax on these gross receipts will be reported and remitted in the same manner as the sales and use taxes beginning with the September 2025 filing period due in October 2025.
Registration will be available beginning Sept. 1.
A media representative for the Alabama Department of Revenue told XBIZ that the department has notified eleven entities thus far, identifying site operators as potentially subject to the tax through “internal research.”
“We’re continuing our efforts to identify others,” the rep said.
Industry attorney Lawrence Walters called the law another example of the increasingly hostile legal climate facing adult website operators at the state level, and noted that enforcing the tax on adult website content could prompt legal challenges.
“This may constitute an unconstitutional content-based burden on speech,” Walters told XBIZ. “Any governmental effort to target a specific category of protected speech for special tax treatment will be highly scrutinized by the courts.
“However, at present, no court order prohibits enforcement of the tax obligations,” he added. “Website operators with any connection to Alabama should consult with their tax advisors to evaluate how this law impacts their business and develop a plan of action.”
The adult site that shared the notice told XBIZ that it had received the letter despite the fact that it has been blocking access in Alabama since October.