Purpose of the Bill

The bill aims to establish an excise tax on businesses operating social media platforms based on their collection of consumer data from Minnesota residents. It's part of efforts to regulate and generate state revenue from digital businesses that profitably use resident data.

Main Provisions

• Tax Imposition: A tax is levied on social media platform businesses based on the number of Minnesota consumers whose data is collected each month.
• Tax Rates:
  • Platforms with up to 100,000 Minnesota users are not taxed.
  • For 100,001 to 500,000 users, the tax is $0.10 per user per month.
  • For 500,001 to 1,000,000 users, the tax is $0.25 per user per month.
  • For over 1,000,000 users, the tax is $0.50 per user per month.
• Definitions and Criteria:
  • A "consumer" is any person with an account on a social media platform from which data is collected.
  • A "social media platform business" collects data from more than 100,000 Minnesota consumers monthly.
  • A "Minnesota consumer" is defined by having a Minnesota address or IP location.

Significant Changes to Existing Law

• New Tax Category: Introduces a new category of excise tax targeting social media companies specifically for their data collection activities.
• Tax Credit Mechanism: Provides for tax credits if a similar tax has been paid to another state for the same consumer.
• Administrative Provisions: Requires regular tax filings from social media platforms with detailed recordkeeping, aligning with existing tax administrative procedures in Minnesota.
• Revenue Management: Revenue collected from this tax, including related penalties and interest, will be deposited into Minnesota's general fund.

Relevant Terms

• Excise tax
• Social media platform business
• Consumer data
• Minnesota consumer
• Digital taxation