Social media companies continue to make significant profits, as Meta alone generated approximately $201 billion in annual revenue in 2025, according to Statista. The addictive nature of social media contributes to that revenue, as it’s been well documented that the mental effects platforms can have on users. This includes low self-esteem, peer pressure, and “infinite scrolling.”  Therefore, taxing these social platforms could be a way to help mitigate the harmful effects. Illinois is one of the first states to implement such a strategy, but will it last?

 

Illinois’ Social Media Tax Explained

On June 16, 2026, Illinois Governor J.B. Pritzker signed Senate Bill 3019 into law. The $56 billion state budget legislation includes taxes on fantasy sports, cryptocurrency, and social media platforms. The taxes will take effect on January 1, 2027, but until then, the state may face backlash from companies operating within the state. Social media platforms that have at least 100,000 Illinois users will face fees of at least 10 cents per user, according to Avalara. The taxes will primarily go to funding state education reform.

 

SB 3019 Social Media Tax Breakdown

• Platforms with 100,000-500,000 Illinois Users: $0.10 per user per month.
• Platforms with 500,000-1M Illinois Users: $40,000 plus $0.25 per user per month.
• Platforms with > 1M Illinois users: $165,000 plus $0.50 per user per month.

While social media companies don’t provide user counts by state, one can only estimate how many users there are in Illinois. In July 2023, a settlement between Instagram and the state over a biometric suit, the state’s legal representatives estimated that between 2015 and 2023, there were four million Instagram users within Illinois eligible to receive compensation, according to GovTech. It’s unlikely that there are that many monthly users in the state, so a practical estimate could be around two million monthly users. In that scenario, Meta would have to pay $1,165,000 per month in taxes for Instagram alone, not including Facebook and WhatsApp, which the company also owns. Platforms also cannot pass the costs of the tax down to consumers.

 

Social Media Platforms May Fight Back

In February 2021, Maryland enacted a digital advertising tax, which targeted large tech companies, especially social media platforms, charging rates up to 10% of digital ad revenue. However, in August 2025, a U.S. appeals court judge ruled that the tax was unconstitutional because it violated the First Amendment by prohibiting companies from telling customers about the tax, according to the University of Maryland School of Business. Companies are also claiming Maryland violated many other laws with the tax. The state law is still in effect, but companies in Maryland have the power to pass on the tax costs to state residents.

Other states, such as California, New York, and Utah, are seeking to implement similar laws to target tech companies that profit from digital ads. However, because these types of taxes are relatively new, they remain vulnerable to constitutional challenges.