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Senate approves 10% tax on adult-oriented businesses to fund offender treatment
Summary
The Utah Senate passed House Bill 239 on March 2, imposing a 10% gross receipts tax on specified adult-oriented businesses to fund treatment for convicted sexual offenders; legislators removed earmarked spending language and debated constitutional and fairness questions.
The Utah Senate passed House Bill 239 on March 2, a measure imposing a 10% gross receipts tax on specified adult-oriented businesses and escort services intended to fund treatment for convicted sexual offenders. The bill passed as amended by a vote of 22 yeas to 4 nays.
Senator Stevenson, carrying the measure on the floor, said the tax was designed to generate dedicated revenue to treat individuals convicted of sexual offenses: “Most *** offenders continue to commit *** offenses if they do not receive treatment,” he said, arguing that treatment is expensive and offenders who must also pay restitution and living costs often cannot afford therapy.
Opponents questioned both the policy and practical enforcement. Senator Demetrij warned the chamber that many workers in the industry are “either single mothers or students” and argued a gross receipts tax risks disproportionately burdening those individuals. Senators also raised concerns about auditing and whether the state tax commission could reliably identify the specific business activities to be taxed.
Floor debate produced a notable amendment process. Senator Wadhams proposed (and the Senate adopted) an amendment removing earmarked spending and specific line items that had designated the distribution of revenues; the amendment passed in a roll-call (17 ayes, 9 nays). A separate deletion of line 28 was also adopted on the floor. After the amendments the Senate adopted recorded final passage (22 ayes, 4 nays). The tax commission’s initial fiscal estimate presented on the floor was $500,000 in year one and $1 million in year two.
Supporters framed HB 239 as targeting secondary social costs associated with these businesses and creating a revenue stream for offender counseling and rehabilitation. Opponents argued the tax could penalize vulnerable individuals who work in the industry and questioned the constitutionality and administrative feasibility of defining and auditing affected business activity.
Next steps: HB 239 will be transmitted to the House as amended for further consideration. The bill’s opponents signaled they may press constitutional and implementation questions in the next chamber or seek further amendments.
