SF3065

Purpose of the Bill

This bill aims to establish a tax on social media platform businesses based on their collection of consumer data from users in Minnesota. It intends to generate revenue by taxing these businesses according to their user base size.

Main Provisions

• Tax Imposition: The bill introduces an excise tax on social media businesses that collect user data from more than 100,000 Minnesota residents in a month.
• Tax Rates:
  • No tax for fewer than 100,000 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:
  • "Consumer" is defined as a person who creates an account with the social media platform.
  • "Consumer data" includes any identifiable information related to the user.
  • "Social media platform" refers to profit companies engaging in business through data collection from users.
• Tax Credit: Companies may claim a credit if they are taxed similarly by another state for the same users.

Significant Changes to Existing Law

• This bill proposes a new excise tax specific to social media businesses, creating a legal framework for taxing these entities based on their data collection practices within the state, which is not covered under existing tax codes.

Administration

• Records and Reporting: Social media businesses are required to maintain records and report taxes as prescribed by the state commissioner.
• Enforcement and Administration: The tax will be managed similarly to other state taxes, with specific rules for audits, payments, and refunds aligning with existing tax laws.

Revenue Use

• General Fund: Revenue collected, including penalties and interest, will be deposited into Minnesota’s general fund.

Relevant Terms

• Excise tax
• Social media platform
• Consumer data
• Minnesota user
• Revenue commissioner