CHICAGO (WGN) In an unprecedented move to address Chicago’s nearly $1.2 billion budget deficit, Mayor Brandon Johnson has introduced a proposal to impose a new tax on social media companies. This initiative marks a first for any U.S. city.

“Similar to how we impose taxes on harmful addictive substances like nicotine and tobacco, it’s overdue that we apply the same logic to social media companies,” stated Mayor Johnson.

The proposed tax would require social media platforms to pay 50 cents for each active user monthly, with the first 100,000 users exempt from the charge. City officials anticipate this measure could generate $31 million annually, which would be allocated to enhance crisis response and support city-operated mental health clinics.

Despite its potential benefits, the proposal is already encountering resistance from both the City Council and legal analysts.

“Considering we would be the first to implement such a tax nationwide, how sure are we about the city’s legal authority to enforce this?” questioned Alderman Brendan Reilly from the 42nd Ward during a budget hearing on Tuesday.

“In our discussions with the Department of Law, they feel we have a strong case that through the amusement tax, this is a tax we can levy on social media companies,” budget director Annette Guzman said.

But legal experts say the tax would not hold up in court.

“On its face, frankly it’s unconstitutional,” said Amy Bos, Vice President of Government Affairs at the trade association NetChoice, whose members include Meta and Snapchat.

Bos pointed to a 1983 Supreme Court ruling that she says supports that view.

“The court ruled you cannot single out media for special tax treatment, and that’s what Chicago is doing here,” Bos said. “The city can tax businesses broadly, but the moment they pick out specific media companies, it becomes constitutionally suspect. They’re going to have to find this money from somewhere else because it simply won’t survive the inevitable legal challenge.”

But Johnson defended his proposal, saying this is just modernizing the amusement tax.

“The amusement tax already exists, and so I would not put something forward if I didn’t think we had the ability to stand the test of any challenge,” he said.

If approved as part of the mayor’s budget, the social media tax would take effect Jan. 1.

“This shows that Chicago, as always, is a leader,” Guzman said.