Minnesota Senate Proposes Nation's First Tax on Social Media Use

The Minnesota Senate Tax Committee approved a bill Thursday morning that would create the country’s first “social media tax.” It’s part of a broader package projected to generate about $365 million in new taxes over the next two years.

Image: Minnesota State Capitol | Wikipedia

Republican members pushed back, criticizing the proposed increases following major tax hikes passed by the DFL-led legislature in 2023. “The people of Minnesota got smoked the last biennium,” said Rep. Steve Drazkowski, R-Mazeppa. “Another $10 billion tax increase.” He warned that further taxation would harm the state’s direction: “We’re heading southbound at 100 miles per hour in the northbound lane.”

Sen. Ann Rest, DFL-New Hope and chair of the Senate Tax Committee, pushed back on that argument. “You have to be really wealthy or a multi-national corporation or Elon Musk to complain about this bill,” she said. Addressing a committee member directly, she added, “You won’t pay one dime” for the social media tax, explaining that it targets large corporations profiting from data mined from Minnesotans.

Sen. Bill Weber, R-Luverne, disagreed with the notion that everyday Minnesotans would be unaffected. “It’s time that we recognize and admit the fact that there is no tax, there is no fee we can place on business that ultimately will not be paid out of the pockets of our consumers,” he said.

The bill also includes cuts to local government aid and reductions—though not elimination—of tax credits for film and media production in the state. Additionally, it proposes a study on the effects of legalizing sports betting in Minnesota, a move that raised concerns among opponents wary it could be used to introduce broader gambling legislation.

“I’m a little leery of that, of sports betting, coming into the tax bill so late in the session,” said Sen. Scott Dibble, DFL-Minneapolis.

The Senate tax bill still needs to clear a vote on the Senate floor, where Democrats hold a narrow one-seat majority. It must also be reconciled with a House version that does not include tax hikes or a social media tax.