Digital Services Tax #2: Social Media Platform Fee
The bill proposes that, beginning January 1, 2027, each social media platform must pay a “fee” to the Illinois Secretary of State based on a monthly report of its average number of monthly users located in Illinois. This imposition is similar to the existing Chicago Social Media Amusement Tax (Chicago SMAT). The tax rate varies from $0.10 - $0.50 per month per Illinois user, after the first 100,000 Illinois users. The Chicago SMAT is imposed at $0.50 per user over 100,000 Chicago users. Each year, the fee charged is increased in accordance with the increase in the Consumer Price Index.
What is a social media platform? A “Social media platform” is defined as:
“a website or internet medium that: (1) permits a person to become a registered user, establish an account, or create a profile for the purpose of allowing users to create, share, and view user-generated content through that account or profile; (2) enables one or more users to generate content that can be viewed by other users of the medium; and (3) primarily serves as a medium for users to interact with content generated by other users of the medium.”
Anti-Pass Through Similar in spirit to the Maryland DAT’s pass-through prohibition, which was found to violate the First Amendment, the bill prohibits a social media platform from varying the cost of “access, features, services, or in-app purchases” based on geographic origin “for the purposes of recouping the” Social Media Platform Fee.
Entity Exclusion Unlike the Chicago SMAT, the Illinois Social Media Platform Fee does not exclude certain entities, such as providers of cloud computing services, Internet search providers, and email service.
We will be releasing another Alert describing the other Illinois tax increases, so stay tuned.
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I assume a social media company can just stop providing downloads of their apps in IL?
How could a state enforce this law? I’m not sending you money because people in your state use my app? Sounds like this is completely unconstitutional.
Uneducated Redneck Piece of Shit
how would a cloud computing service be a social media platform?
on June 4, 2026, 11:18:34