Tax on social media proposed, impact debated by Minnesota lawmakers | FOX 9 Minneapolis-St. Paul
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Tax on social media proposed, impact debated by Minnesota lawmakers

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Published  April 9, 2025 5:08pm CDT
Social Media
FOX 9

Minnesota social media tax considered

Minnesota could become the first state to tax social media companies if a new bill gets passed by lawmakers this year. FOX 9’s Corin Hoggard explains how it could work.

The Brief

    • A pair of DFL bills would create a use tax on social media in Minnesota, generating an estimated $92 million a year in revenue.
    • The bill would charge an escalating tax on social media platforms based on their number of users in Minnesota. Sites with more than 100,000 users would be subject to tax. There are 14 of those right now, according to the Department of Revenue.
    • Tech lobbyists and Republicans opposed the bills, saying it could impact small businesses that rely on social media.

ST. PAUL, Minn. (FOX 9) - Minnesota could become the first state to tax social media companies if a new DFL bill gets passed.

But their Republican counterparts seem less than thrilled by the idea.

The original tax

Big tech only:

Platforms with more than 100,000 users would have to pay the new social media tax.

The bigger the platform, the bigger the tax, and the state expects revenue of more than $90 million a year.

Tik Tok, Facebook, Instagram, Truth Social, Bluesky – the names are ubiquitous in the U.S., where almost 250 million people use social media and part of the appeal is that we use them for free. 

"If you are not paying for a service, you are not the consumer, you are the product being sold," said Rep. Zack Stephenson, (DFL-Coon Rapids). "And with social media, that is exactly what is happening."

Smoking solutions?

Help or harm:

Stephenson compared the harms of social media to cigarettes, and argued the solutions may look the same.

He doesn’t want to ban social media, but he supports a bill to tax them.

"The bill does nothing to stop what is a real harm," said Rep. Kristin Robbins (R-Maple Grove).

House Republicans argued social media companies will just pass the tax to their users.

Some say people know their data is being mined for profit, so they should just stop logging on if they think it’s bad.

Unintended consequences

Tech industry warning:

Tech lobbyists have warned of unintended consequences.

"This could lead companies to limit or scale back free widely used services like Gmail, Google Maps, YouTube and Facebook," said Kouri Marshall of the Chamber of Progress.

They also say retailers and restaurants get affordable advertising on social media and this could increase those costs.

But on the flip side, businesses that aren’t virtual believe the tech industry should pay its fair share.

"If we don't do things like this and find ways to tax industries that are growing in new areas and generating a lot of revenue, then the burden will remain relatively higher on all of those more traditional industries," said Eric Bernstein of We Make Minnesota.

What's next:

The bill passed through committees in the House and Senate on Wednesday, but House Republicans could block it from ever getting a vote, so its destiny is uncertain.

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