Minnesota lawmakers consider tax on social media platforms

Minnesota Democrats want social media platforms to pay up

They introduced a bill Wednesday taking aim at a business model where users are not the customer but the product

Nobody is providing these ostensibly free services out of the kindness of their little billionaire hearts

They're doing so because they're making a lot of money doing it. House Representative Aisha Gomez says the money these companies make comes from the millions of people who use their platforms

and that's why she's sponsoring the bill. Gomez, who co-chairs the House Taxes Committee

introduced the legislation by asking, why should these giant companies get to track everything we

do online for free? For context, Meta says Facebook alone generated $62 billion in profit

last year with $164 billion in revenue in 2024. An excise tax on social media companies based on

the number of Minnesota residents who use their services in a month and whose data they are

mining. How much a company like Snapchat, Meta, or TikTok would pay depends on how much data they

collect. So in other words, the bigger the company, the higher the bill. The tax would range from 10

to 50 cents per user each month. Larger companies with over 1 million users could pay up to $165,000

a month. Platforms with fewer than 100,000 active users wouldn't have to pay the tax

The Minnesota Department of Revenue estimates the bill could bring in over $45 million in fiscal

year 2026 based on at least 14 companies being taxed All the money would go into the state general fund And beyond just boosting state revenue Gomez says this bill also takes on the impact social media has on kids

It can impact children's, you know, self-image and body image. A local church is a strong supporter of the bill, saying taxes are one way the state provides

equal support to everyone living in Minnesota, especially now at a time when the country feels

so divided. Wealthy individuals and corporations have been manipulating the system behind their

backs and are now paying far less than their fair share. Even though a number of supporters

expressed the benefits the bill could have, others said there are plenty of negative outcomes that

could surface. In addition to the economic harm that this bill could do, there are serious legal

concerns. It risks violating the Permanent Internet Tax Freedom Act and it may also be

vulnerable under the Commerce Clause, particularly by targeting internet-based activity in a way that

could be burdensome for interstate commerce. Some committee members argue the bill doesn't

really get to the root of the problem, pointing to the user agreements people have to accept to

use social media apps. I don't see any correlation between taking the money that would be collected

from these services and using it to deal with the harmful bullying, the internet issues that

you're bringing up. This simply just funds the government. The bill was read in the House and

Senate committee, it could be folded into the tax bill at a later date. Minnesota is currently

facing a budget deficit, forcing lawmakers to cut spending and look for new ways to bring in revenue

For Straight Arrow News, I'm Kaylee Carey. For all your latest news headlines and fact-based

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