Purpose of the Bill

The purpose of this bill is to establish an excise tax on social media platform businesses that collect consumer data from users in Minnesota. The bill aims to generate revenue from companies benefiting from user data collected within the state.

Main Provisions

• Tax Imposition: The bill imposes a tax on social media platform businesses that collect consumer data from more than 100,000 Minnesota residents in a single month.

• Tax Rates:

  • 0.10 per month for businesses collecting data from over 100,000 but not more than 500,000 users.
  • $40,000 plus 0.25 per month for data collected from over 500,000 but not more than 1,000,000 users.
  • $165,000 plus 0.50 per month for businesses with data from over 1,000,000 users.

• Definitions:

  • "Consumer" refers to individuals who have accounts on social media platforms and from whom data is collected, regardless of payment.
  • "Social media platform business" is any for-profit entity that gathers and processes consumer data and has data from over 100,000 Minnesota users in a month.

• Taxpayers' Responsibilities:

  • Businesses must prove if a user is not a Minnesota resident if their records show a Minnesota address or connection.
  • Monthly tax calculations must include each Minnesota consumer only once.

• Credit for Taxes Paid Elsewhere: Businesses can claim a credit if they pay the same excise tax in another state for the same Minnesota consumer.

• Compliance and Administration:

  • The Commissioner of Revenue will oversee tax filing, payment management, record-keeping, and additional administrative processes.
  • Detailed records must be maintained by social media platforms for verification purposes.

• Revenue Allocation: Collected taxes, along with penalties and interest, will be deposited into the state’s general fund.

• Debt and Penalties: The tax and its associated penalties become a personal debt of the business if obligations are not met.

Significant Changes to Existing Law

The bill introduces a new tax structure specifically targeting social media platforms collecting data from Minnesota residents, a novel approach in Minnesota tax law. It creates a framework for taxing businesses on data collection activities, rather than traditional income or sales.

Relevant Terms

• Excise tax
• Social media platforms
• Consumer data
• Minnesota resident
• Data collection
• Revenue generation
• Tax liabilities
• Compliance and administration