Purpose of the Bill

The bill aims to establish an excise tax on social media platform businesses that collect consumer data from Minnesota residents. The objective is to generate revenue by taxing companies based on data collection activities within the state.

Main Provisions

• Tax Rate: The bill introduces a tiered excise tax for social media companies:

  • No tax for companies with data from 100,000 or fewer Minnesota users.
  • $0.10 per user per month for 100,001 to 500,000 users.
  • $0.25 per user per month for 500,001 to 1,000,000 users.
  • $0.50 per user per month for over 1,000,000 users.

• Definitions:

  • A social media platform business is defined as a for-profit entity that collects and processes data from over 100,000 Minnesota residents per month.
  • Minnesota consumer refers to a user who resides in Minnesota.

• Tax Administration: Social media companies must report and remit the tax in a form prescribed by the state’s commissioner of revenue. They are required to maintain records and file returns on specified dates.

• Cross-state Tax Credits: Companies can claim credits for taxes paid to other states implementing similar excise taxes on social media data collection.

• Enforcement and Compliance: Provisions align with existing Minnesota tax regulations regarding audits, refunds, and appeals.

• Revenue Usage: All tax revenues, plus any penalties and interest, will be deposited into Minnesota’s general fund.

Significant Changes to Existing Law

This legislation introduces a new form of taxation in the state of Minnesota, specifically targeting how social media platforms handle user data from residents. Such a tax was not previously imposed, making this a significant regulation in addressing digital data usage and privacy.

Relevant Terms

social media, excise tax, consumer data, Minnesota residents, user data collection, social media platform, digital privacy, state revenue