Purpose of the Bill

The proposed legislation aims to establish an excise tax on social media platform businesses that collect consumer data from users in Minnesota. This initiative seeks to generate revenue for the state by taxing the digital activities of these businesses based on the number of Minnesota-based users from whom they gather data.

Main Provisions

• Tax Imposition: A tax is levied on social media companies according to the number of Minnesota residents using their platforms. This is specifically tied to the collection of consumer data.

• Tax Rates: The tax rate is tiered based on user numbers:

  • No tax for social media platforms with data from 100,000 or fewer Minnesota users.
  • $0.10 per user per month for platforms with more than 100,000 but fewer than 500,000 users.
  • $40,000 base plus $0.25 per additional user per month for 500,000 to 1,000,000 users.
  • $165,000 base plus $0.50 per additional user per month for over 1,000,000 users.

• Definitions:

  • A "consumer" is any individual creating an account on a social media platform.
  • "Consumer data" includes information identifiable or linkable to an individual.
  • "Social media platform business" refers to profit-driven entities processing data to support business operations.

• Tax Credit: Social media businesses may receive a credit against the tax if another state imposes a similar tax on the same consumer.

• Administration and Enforcement: The bill outlines provisions for recordkeeping, reporting, and enforcement procedures. It integrates with existing Minnesota tax laws for management, including audit and appeal processes.

• Revenue Usage: Collected taxes, penalties, and interest will be deposited into the general state fund.

• Personal Debt: The tax is considered a personal debt of the responsible entity or fiduciary, becoming enforceable upon incurrence.

Significant Changes to Existing Law

This bill introduces a new taxation model within Minnesota's statutes, specifically targeting social media companies collecting data from state residents—a novel approach as current legislation does not impose such a tax on digital data collection activities.

Relevant Terms

• Excise tax
• Social media platform
• Consumer data
• Minnesota resident
• User count-based taxation
• Digital revenue