Legal Aspects

Let me preface this by saying I am not a lawyer, so I can give no legal advice.  I highly recommend that every webmaster, at some point, consult with an entertainment attorney to go over his or her specific web business.

No having said that, there are a few issues which can be brought up here.

1.  Copyrights

Except for a small portion of the pictures on the net, there is no such thing as "public domain" with regards to pictures.   The Berne Convention allows that photographers or copyright holders do not have to express that a copyright is held--it is an assumption.  By taking pictures off the net and exhibiting them without permission from the rightful owner, you are breaking the law and could be held liable in civil or criminal cases.

Written word, be it html or text, is also protected.  You cannot copy another's html just because it ranks high on a search engine then use it for yourself.  This work belongs to another.  You can, however, use words taken from another source as part of the fair use practice.  This is limited, but it covers quotes for academic review or commercial review of another site.   In the adult business, however, this will not normally come up.

2.  Content

In the US, child pornography is ILLEGAL.   Even the perception of child pornography (dressing up an 18-year-old in schoolgirl clothes) is illegal.  While the perception may be legal in Japan, and while pictures of nude children may be legal in some European countries, this is still patently illegal in the US.  You can, and probably will, be prosecuted if you offer this content up on your site.

Other content, such as fisting, watersports, bestiality, etc may or may not be illegal in certain localities.  In the US, the "public standards" of obscenity can encompass almost anything in which a prosecutor can convince a jury is obscene.  Any lewd displays of genitalia, sex acts, or simulated sex acts have the potential to be considered obscene.  And even if something would not be considered obscene in your home town, you can be prosecuted in other areas as you have made the material available, via the internet, to these areas.

My personal feelings, and remember, that these are my feelings and are not based on my legal qualifications, is that you would probably not be under a high likelihood of getting into legal trouble for most hardcore or fetish content.  However, I would still offer such content in back of a membership or avs protection.

3.  COPA (CDAII)

The Child On-line Protection Act is still under court review.  If passed, the act will essentially prohibit the showing of adult material where children can access it.  As a practical effect, it will essential ban all free adult sites.  However, the law will allow sites in back of avs firewalls.   The act of using a credit card to gain membership is considered proof that the member is an adult.

4.  Taxes

As a US resident or citizen, you will be required to pay taxes on income made through the internet.  Most avs or partner companies will issue you a W-9, but even with companies based out of the US (such as Certifier), you are required to report that income despite the fact that no W-9 will be issued.  In business school, it is often mentioned that you might cheat on your wife, you might cheat in cards, but you never cheat the IRS.  Just ask John Dillinger.   Consult with a CPA to ensure you are set up to minimize your tax burden.