In a bold move that could set a precedent for how social media companies are taxed for user data, the Minnesota Senate Taxes Committee, chaired by Senator Ann Rest, recently deliberated on a bill aiming to impose an excise tax on these digital giants. According to the discussions highlighted by the Senate DFL's official site, this "First-In-the-Nation" measure would have tech moguls like Elon Musk and Mark Zuckerberg's companies pay for profiting off Minnesotans' data without charge.
Social media firms have been harvesting consumer information freely, but Senator Rest told the Senate DFL this proposed tax could bring in an estimated $334 million over four years, a boon in light of looming budgetary concerns, the state anticipates potential federal policy disruptions and spending reductions from the Trump Administration and Congress that's put them in a financial crunch, she says this tax could mitigate some of that stress by not affecting Minnesota taxpayers directly. Small companies with less than 100,000 monthly users in Minnesota would be exempt, while those with more significant user bases could face substantial taxes. For instance, those with 500,000 to 1 million users would pay $40,000 monthly plus additional fees based on user counts, escalating to $165,000 a month plus add-ons for companies with user numbers exceeding 1 million.
These funds, according to Senator Rest, could offset Minnesota's budgetary shortfall, leaving state taxpayers unburdened. "No Minnesotan will be taxed under this plan and every penny raised will help us balance our state’s budget," she asserted in the statement obtained by the Senate DFL site. And it's not just a drop in the bucket—the Minnesota Department of Revenue forecasts that the proposed tax measures, which would be implemented beginning in 2026, are expected to target 14 social media companies, generating almost $46 million in the initial fiscal year and close to $100 million annually thereafter.
The Senate has set the stage for other regions to follow—hoping Minnesota models a new financial relationship between social media corporations and the data of the people, says Senator Rest, a vision where tech tycoons no longer ride on the coattails of consumer data without fair compensation to the state. While the Senate bill has been laid over for possible inclusion in the final tax bill, the Minnesota House is already reviewing its companion bill, pointing toward a tangible shift in the legislative handling of social media companies' data commodification practices. With such a proposal, Minnesota not only takes the lead but also invites a broader conversation about the value of personal data and who should rightfully profit from it.
