Minnesota Senate Bill SF3425

Minnesota 2025-2026 Regular Session

• Introduced: 4/24/25
• Refer: 4/24/25

Caption

Social media platform businesses excise tax establishment

Summary

SF3425 would create a new excise tax on certain social media platform businesses based on the amount of Minnesota consumer data they collect. The tax applies only to for-profit entities operating a social media platform that collect data on more than 100,000 individual Minnesota consumers in a month. The bill sets a tiered monthly tax structure tied to the number of Minnesota consumers whose data is collected, with no tax below the threshold and increasing fixed-plus-per-user amounts at higher user counts. The bill defines key terms broadly, including “consumer data,” “Minnesota consumer,” and “social media platform business,” and it presumes a user is a Minnesota consumer if account records or an IP address indicate a Minnesota connection unless the business proves otherwise. It also treats controlled corporate groups as a single entity for threshold purposes and allows a credit if another state imposes an identical tax on the same consumer. The tax would be administered under existing Minnesota tax collection and enforcement procedures, with revenues deposited into the general fund, and it would take effect for consumer data collected after December 31, 2025.

Impact

The bill would add a new section to Minnesota Statutes chapter 295 establishing a social media gross receipts-style excise tax and would expand the state’s tax code to reach data collection by large social media companies. It would impose new filing, recordkeeping, payment, audit, penalty, and collection obligations on affected businesses, while giving the commissioner of revenue authority to administer the tax under existing tax enforcement provisions. The measure would primarily affect large social media platforms operating in Minnesota and could also influence how companies identify Minnesota users and track consumer data for tax purposes.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the bill text alone, the proposal appears designed to raise revenue from large social media companies and to target businesses that collect substantial amounts of user data. The absence of discussion records means sentiment cannot be assessed beyond the bill’s structure and sponsors.

Contention

The main points of contention likely involve the tax’s scope, the user-count thresholds, and the presumption that a user is a Minnesota consumer based on address or IP information unless the business rebuts it. Businesses may object to the compliance burden, the breadth of the data-collection definition, and the possibility of being taxed on users who are difficult to verify as Minnesota residents. Another likely issue is whether the tax could be viewed as duplicative or difficult to coordinate with other states’ taxes, although the bill includes a limited credit for identical taxes paid elsewhere.