Social media platforms are unable to shift new fees onto their users.
The latest budget from Illinois introduces several new taxes, including one aimed at social media companies operating within the state. The system is structured to tax platforms based on user numbers: Platforms with between 100,000 and nearly 500,000 users face a charge of 10 cents per user monthly, representing the lowest tax bracket. This fee escalates for platforms with 500,000 to just under a million users, who will pay $40,000 each month plus an extra 25 cents per user over the 500,000 threshold. The highest bracket targets platforms with over a million users, imposing a fee of $165,000 monthly along with 50 cents per user exceeding the million-user mark. This taxation is expected to generate $200 million annually, and importantly, these platforms are prohibited from transferring these costs to users.
During a discussion with host Jim Niedelman, House Minority Leader Tony McCombie and State Senator Mike Halpin delved into the implications of this new tax.
“This fee targets major tech companies like Facebook and TikTok, based on their Illinois user base,” explained Halpin. “It establishes a direct financial relationship with Illinois, a state where these companies have not contributed adequately to mitigating the negative impacts of social media.”
“This is a social media platform fee that charges the big tech companies like Facebook and TikTok, based on the number of their Illinois users,” Halpin said. “It’s a direct connection to the state of Illinois, a state where they don’t contribute to addressing a lot of the harms of social media.”
“We, as the users, are going to be paying them, so it is a tax on us,” McCombie said. “It’s not big corporations that are going to be paying for these.”
To hear more, click on the video above.