A Minneapolis Democrat is pushing for Minnesota to become the first state in the nation to levy excise taxes on the world’s largest social media companies.
Authored by Rep. Aisha Gomez, DFL-Minneapolis, HF 3117 would raise nearly $150 million in revenue over the next two years by taxing Facebook, X, TikTok and other industry titans. Those taxes would be determined by the number of Minnesotans who use the services and have their data mined by those companies.
Earlier this month, the bill was discussed in a meeting of the Taxes Committee of the Minnesota House of Representatives.
Speaking about HF 3117, Gomez said social media platforms “generate billions of dollars in revenue through ad sales, yes, but increasingly through data mining; through tracking every single little thing that each of us are doing when we’re on the internet, and every little thing that our children are doing when they’re on the internet.”
Gomez also made reference to Elon Musk and Mark Zuckerberg, two of the world’s most influential social media executives. Specifically, the DFL lawmaker said the “billionaire bosses” of social media platforms “have departments full of lawyers and accountants who work to ensure they never pay a dollar of income taxes.”
In turn, Gomez said the goal of her bill is to “acknowledge” that social media companies are collecting personal data, potentially damaging children, and there are resulting social costs. As such, she said those companies “should be paying taxes based on the practice of data mining.”
Fourteen social media companies would be subject to the excise tax
The language of HF 3117 establishes a “per user” tax structure for social media platforms; once the number of monthly users passes certain thresholds, the excise tax increases. Under the bill, any social media platform with less than 100,000 monthly users who live in Minnesota would not be subject to the tax.
According to Gomez’s bill, social media companies who have between 100,000 and 500,000 monthly users in Minnesota would pay 10 cents per person (above 100,000) every month. Companies that have between 500,000 and 1 million users in the state would be taxed $40,000, plus 25 cents per user (above 500,000) every month.
Platforms with more than 1 million monthly consumers in Minnesota would be taxed $165,000 per month, plus 50 cents per user (above 1 million).
The Minnesota Department of Revenue (MDR) estimates the legislation would generate more than $45 million in 2026 and nearly $93 million in 2027; even more revenue would be generated in the following two years. MDR anticipates that 14 social media platforms will be subject to the tax.
Gomez worked with MDR to determine how the state would levy the excise taxes, which no state in America has implemented for social media companies.
Minnesota broadcasters share warnings about the bill
While the bill was laid over for possible inclusion in an omnibus bill, it received support from Democratic legislators who spoke during the committee hearing.
Additionally, an organization representing several major unions in Minnesota submitted written testimony in support of the bill which said HF 3117 “will improve not just the sufficiency but the stability of our tax code, while ensuring that the largest and most profitable corporations pay their fair share.”
Similarly, a representative for the Minnesota Association of Professional Employees (MAPE) told the committee that Gomez’s legislation is an “innovative and reasonable proposal” to find more state revenue as Minnesota faces budget problems and “current uncertainty in federal funding.”
Wendy Paulson, president of the Minnesota Broadcasters Association (MBA), warned the committee that the bill’s language could unintentionally result in local broadcasters being subjected to the proposed tax. These broadcasters, who produce news for the public, often use digital platforms to reach the public.
“Specifically, MBA members have concerns about the potential impact on medium and large local broadcasters,” said Paulson.
The MBA president explained that these broadcasters “collect user data through site visits, newsletter sign-ups, and advertising tools.” In turn, that collection may end up surpassing the 100,000 user threshold and could trigger the proposed excise tax.
“The bill’s definitions of social media platform and consumer data are broad, and without clear guardrails or exemptions, it risks sweeping in local broadcasters who are simply using modern tools to deliver free, essential information,” said Paulson.
Earlier in the discussion, the committee adopted an amendment pushed by the Minnesota Chamber of Commerce that sought to specify that the bill is about social media platforms. Paulson said her group appreciates the committee’s work to clarify the bill’s language, but said the MBA would “continue to evaluate its potential impact on our members.”
A collection of tech groups and taxpayer protection organizations also submitted written testimony saying the bill violated federal law, harmed the advertising industry, and would force companies to collect even more data about consumers in order to determine how to pay the excise tax.
Republican legislators criticized the bill as well.
“To me, this is just a ridiculous bill in the sense that we have private users, users that consume a product that they know that their data is being mined,” said Rep. Drew Roach, R-Farmington, during the hearing. “This is part of the user agreement that they have when they use these apps.”
Roach added that many consumers like the direct marketing that is produced from user data, the government should not be the beneficiary of a perceived problem, and the free market would role out a social media app that pays consumers for their data if that demand arises.
Hank Long
Hank Long is a journalism and communications professional whose writing career includes coverage of the Minnesota legislature, city and county governments and the commercial real estate industry. Hank received his undergraduate degree at the University of Minnesota, where he studied journalism, and his law degree at the University of St. Thomas. The Minnesota native lives in the Twin Cities with his wife and four children. His dream is to be around when the Vikings win the Super Bowl.
