This state might start charging a social media fee — here’s what it means

The strategy could generate as much as $200 million in added tax revenue for Illinois, according the state government

Illinois’ governor believes it’s time for social media platforms to pay up.

The new proposal would charge social media companies up to 50 cents a month, per active user they obtain data from. The move would generate an estimated $200 million per year for the state, according to Governor J.B. Pritzker’s office.

The “Digital Platform Fee” is intended to cover costs the state pays for the negative impact of social media on Illinois residents, and would be included in the state’s fiscal year 2027 budget.

“As big tech companies continue to profit off of surveilling youth, creating addictive algorithms, and abandoning their responsibility to keep kids and consumers safe, the American public is paying the price,” the governor’s office stated in a fact sheet.

“From negative psychologic impacts on youth to consumer scams on the elderly, state governments are bearing the societal costs of irresponsible tech.”

Illinois Gov. J.B. Pritzker has proposed an interesting way to boost the state’s tax revenue (Daniel Boczarski/Getty Images for Vox Media)

Companies such as Instagram and Facebook would face tiered monthly fees depending on their size:

• 100,000 to 500,000 Illinois users: 10 cents for every user above 100,000
• 500,000 to 1 million Illinois users: 25 cents for every user above 500,000, plus an a monthly $40,000 fee
• 1 million or more Illinois users: 50 cents for every user above 1 million, plus a monthly $165,000 fee.

A provision in the proposal would prohibit companies from passing the fees along to their users. The tax revenue generated by the fee would be invested in Illinois’ education system, the fact sheet noted.

The possible fees come as the state is facing a roughly $2 billion budget shortfall for financial year 2027, Chicago’s ABC 7 reported. Enacting the levy on social media companies would be unique at the state level, but not at the city level.

Chicago became the first major city in the U.S. to enact a social media tax on January 1 of this year, charging platforms that collect consumer data a monthly tax of 50 cents per user over 100,000 users, according to the Chicago Department of Finance.

Chicago’s social media tax went into effect on January 1 (Getty Images)

The fee is projected to generate $31 million in revenue for the city, according to an analysis by accounting firm Ernst & Young.

Several other states have made attempts to tax social media companies, including California, Hawaii, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Pennsylvania, Rhode Island and Tennessee.

Minnesota lawmakers unsuccessfully proposed a social media tax in early 2025. Rep. Aisha Gomez sponsored the bill that would’ve implemented the tax, which the state’s revenue department estimated would generate as much as $92.7 million by fiscal year 2027, according to Minnesota’s House of Representatives.