Illinois’ new social media tax explained

Illinois’ new budget includes a variety of new taxes.

One of those targets social media companies that operate in the state. Here’s how it’s supposed to work: Platforms that have 100,000 to almost half a million users will be taxed 10¢ a month for each user. That’s the lowest tier. It increases for middle tier platforms with 500,000 users to just shy of a million users. That charge will be $40,000 a month and an additional 25¢ a month for each user above the half a million mark. The highest tax tier is for platforms with a million or more users. Their fee is $165,000 a month on top of 50¢ a month for each user beyond the million mark. The tax is projected to raise $200 million a year, and social media platforms can’t pass along the fees to their users.

Host Jim Niedelman got into the issues with House minority leader Tony McCombie and state senator Mike Halpin.

“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.

Question of the Week

That brings us to our question of the week: What do you think about Illinois imposing new taxes on social media, digital advertising and fantasy sports? Please share your thoughts at 4therecord@whbf.com. or respond to this post on Facebook here or here.

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