Minnesota lawmakers consider tax on social media platforms

• Minnesota Democrats have introduced a bill to tax social media companies based on the amount of user data they collect from state residents. The proposal could generate over $45 million annually, with larger platforms paying up to $165,000 per month.
• Rep. Aisha Gomez and local community leaders said the bill would help fund state programs and address the impact of social media on children.
• Critics argue that the bill could violate federal law, harm the digital economy and fail to address the core issue of user consent.

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Minnesota Democrats have introduced legislation that would impose a monthly tax on social media companies based on how much user data they collect from state residents.

Bill to tax social media companies

The bill, introduced Wednesday, April 9, targets what lawmakers describe as a business model that social media companies follow in order to profit from user data.

State Rep. Aisha Gomez, DFL-District 62A, who co-chairs the House Taxes Committee and is the bill’s sponsor, described the proposed legislation as “an excise tax on social media companies based on the number of Minnesota residents who use their services in a month whose data they are mining.”

Gomez said the legislation is rooted in the belief that social media companies generate revenue mainly because of the sheer number of people who use their platforms and the data that platforms gain from those users.

“Nobody is providing these ostensibly free services out of the kindness of their little billionaire hearts,” Gomez explained. “They’re doing so because they’re making a lot of money doing it.”

What are the numbers?

Meta reported $62 billion in profit from Facebook alone in 2024, with $164 billion in total revenue.

Under the proposal, large platforms with more than one million active users in Minnesota could pay up to $165,000 per month. Companies with fewer than 100,000 users in the state would be exempt from the tax.

According to the Minnesota Department of Revenue, the measure could generate more than $45 million in fiscal year 2026, based on at least 14 companies being taxed. All funds would go into the state’s general fund.

But Gomez insists the bill is about more than revenue.

“It could impact children’s, you know, self-image and body image,” she said, referring to concerns over how social media use affects young people.

Some community leaders support the proposal

The bill has drawn support from community leaders. Rev. Juli Thompson of St. Stephen Lutheran Church in White Bear Lake, Minnesota, said the tax represents a step toward fairness in the state’s funding systems.

“Wealthy individuals and corporations have been manipulating the system behind our backs and are now paying far less than their fair share,” Thompson said. “Taxes are one way the state provides equal support to everyone living in Minnesota.”

Critics express legal and economic impacts

But not everyone supports the measure. Critics raised legal and economic concerns during the bill’s hearing.

“In addition to the economic harm that this bill could do, there are serious legal concerns,” said Deb Peters of Americans for Digital Opportunity. “It risks violating the Permanent Internet Tax Freedom Act, and it may also make us vulnerable under the commerce clause, particularly by targeting internet-based activity in a way that could be burdensome for interstate commerce.”

Some lawmakers said the legislation doesn’t address the underlying issues of user data privacy or the adverse impacts of social media.

“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,” said Rep. Mike Wiener, R-District 5B. “This simply just funds the government.”

Others on the committee echoed concerns that the bill may overlook the fact that users agree to terms and conditions when joining these platforms.

What happens next?

The bill has been read in both House and Senate committees and could be included in a larger tax package later in the session.

Minnesota is currently facing a budget deficit, which is forcing lawmakers to consider both spending cuts and new revenue sources.