Senate Taxes Committee debates excise tax on social media data; A2 amendment adopted, bill laid over

The Minnesota Senate Taxes Committee considered Senate File 3,197, a bill that would impose a graduated excise tax on social media platform businesses that collect data on Minnesota consumers. The committee adopted an author's A2 amendment and laid the bill over for further consideration.

Sen. Rest, the bill's author, told the committee the proposal would tax "the businesses of social media" rather than Minnesotans as individuals, drawing the line by applying the excise to platforms that collect data on more than 100,000 consumers in any given month. "No Minnesotans as individuals or companies, individually will be, will be taxed by this," she said, and described the proposal as a way to "modernize the way in which our tax systems work." The bill would be administered under procedures similar to Minnesota's sales tax system and deposit revenues into the state general fund.

Why it matters: The bill targets a rapidly growing sector of the economy that the author and supporters say has been lightly taxed relative to its economic value. The committee heard competing views on whether the proposal would raise durable revenue and on its legal vulnerability under federal law.

How the bill would work: As presented in committee, the bill defines a "consumer" as an individual who establishes an account on a social media platform (by app or website) and defines a "social media platform business" as a for'profit entity that collects consumer data to support its business and collects data on more than 100,000…