Expert: Dan Pepper - 7/15/2009

Question
When starting and Adult Website which purchases content produced by other websites, what, if any, records must I keep related to the content? I already have an S-Corp that was never really used. I plan on using that and keeping the appropriate records for tax purposes, so the question I'm asking is, What other records must I keep?

Answer
If you are acting as a secondary producer, as that term is defined under 18 U.S.C. 2257, you are required to follow the obligations listed here:  http://www.usdoj.gov/criminal/optf/links/2257-compliance-guide.html

Pay special attention to the following:

Q. Who is required to maintain records?

   A. Both primary and secondary producers of covered materials. A primary producer "is any person who actually films, videotapes, photographs, or creates a digitally- or computer-manipulated image, a digital image, or a picture of, or who digitizes an image of, a visual depiction of an actual human being engaged in actual or simulated sexually explicit conduct." 28 C.F.R. § 75.1(c)(1). A secondary producer "is any person who produces, assembles, manufactures, publishes, duplicates, reproduces, or reissues a book, magazine, periodical, film, videotape, or digitally- or computer-manipulated image, picture, or other matter intended for commercial distribution that contains a visual depiction of an actual human being engaged in actual or simulated sexually explicit conduct, or who inserts on a computer site or service a digital image of, or otherwise manages the sexually explicit content of a computer site or service that contains a visual depiction of, an actual human being engaged in actual or simulated sexually explicit conduct, including any person who enters into a contract, agreement, or conspiracy to do any of the foregoing." 28 C.F.R. § 75.1(c)(2).

Q. Who is not required to maintain records?

   A. Individuals or entities are not covered producers if their role with respect to covered materials is limited to photo or film processing; distribution; services that do not involve the hiring, managing, or arranging of the participation of depicted performers; providing telecommunications or Internet services; transmission, storage, retrieval, hosting, formatting, or translation of a communication, without selection or alteration of the content of the communication; or dissemination of a depiction without selection or alteration of its content. See 28 C.F.R. § 75.1(c)(4).