Government officials may not fully understand what social media is, but they damned well plan to do something about the ills it may or may not inflict on our society. They’ll happily start with extracting some money from the companies behind social media, though it may take a few tries, given politicians’ complete lack of understanding of the thing they want to tax. Illinois is a good example, where legislators just passed an attempt at a social media levy that runs afoul of its authors’ ignorance.
“A nearly $56 billion state spending plan is headed to Gov. JB Pritzker’s desk after the Democratic-controlled Illinois legislature approved it in the early-morning hours of another overtime spring session,” the Chicago Tribune‘s Dan Petrella noted last week. “The biggest source of new revenue is a new per-user tax on large social media companies.”
The governor’s signature is essentially guaranteed, since the budget proposal and social media tax originated in his office. Pritzker hopes to raise $200 million per year from the scheme. But the plan faces challenges, not least of which is that a similar tax passed by Chicago is tied up in court. Another and potentially more serious problem, as pointed out by Dan Levin of Straight Arrow News, is that “one of the elements that remains the most unclear is what exactly is being taxed? The language in the bill does not answer that question directly and is, frankly, confusing.”
As passed, the budget plan imposes a tax on social media companies based on “the average number of monthly users of the platform located in the State of Illinois.” Platforms with 100,000 to 500,000 “Illinois users” will have to pay $0.10 per user each month; platforms with 500,000 to 1 million “shall pay $40,000, plus $0.25 per month” per user; and platforms with over 1 million users will pay $165,000, plus $0.50 per user, each month on the number of users over 1 million. A provision adjusts the tax for inflation starting in 2028. Companies that fail or refuse to pay will be punished with a fee of “an amount equal to 100% of the unpaid fee and any penalties each month until the fee is paid.”
That’s an awful lot of numbers backed by dire threats. But it still doesn’t clarify how to tally up the bill.
Hellbound and Down 