This state is considering a new tax on social media: here’s how it would work and who would have to pay it

Minnesota wants to tax the attention economy. Specifically, a new bill making its way through the state legislature would slap a fee on social media giants – those with over 100,000 users – as a way to cash in on the platforms that dominate your screen time.

If it passes, Minnesota would be the first state to impose a direct tax on social media companies. That’s a milestone, though whether it’s viewed as progress or punishment depends on who you ask.

Why is Minnesota proposing a social media tax?

Rep. Zack Stephenson, a Democrat from Coon Rapids, is leading the charge on this. His argument is that social media is doing harm, and taxing it – just as we do with cigarettes, for example – might be the best way to respond. He’s not pushing for bans or restrictions, just for the companies profiting off users’ attention and data to give something back.

The bill, passed through key House and Senate committees, targets companies like TikTok, Instagram, Facebook, Bluesky, and Truth Social. Zuckerberg, Trump, Yiming et al will be watching, The tax rate would scale based on user volume, and Minnesota estimates it could pull in over $90 million a year.

Stephenson says the platforms treat users as products, not customers. “If you’re not paying for a service,” he said, “you’re the product being sold.”

Who pays the tax and how will it affect the apps?

Theoretically, the companies. Realistically? That’s where things get sticky.

Republicans in the House aren’t buying the idea that Big Tech will eat the cost. They argue the tax will trickle down to users—through higher advertising rates, changes to access, or even charges for services that are currently free.

“If you think social media is bad for you, stop using it,” Rep. Kristin Robbins, a Republican from Maple Grove, said during debate. “This bill does nothing to stop what is a real harm.”

That’s the concern from the tech industry. Groups like the Chamber of Progress warn that a state-level tax like this could lead companies to scale back free services like Gmail, Google Maps, and YouTube, not just social media platforms.

Kouri Marshall, a lobbyist for the Chamber, argues that smaller businesses could be hit, too. Many retailers and restaurants rely on cheap, targeted ads to reach customers via social platforms. A tax could raise the cost of doing that.

But some local advocates disagree. They say tech companies have had a free ride for too long, and it’s time they contributed to public budgets like everyone else.

“If we don’t do things like this,” said Eric Bernstein of We Make Minnesota, “the burden stays heavier on traditional industries.”

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