Big tech companies sue to block Chicago's new social media tax

"They are singling out certain publishers for disfavored taxation for having a broad audience, and the Supreme Court has rejected that. This tax and taxes like it are essentially a penalty on publishing popular speech. The city of Chicago is attempting to penalize popular services for the fact that they're reaching broad audiences, and that is unconstitutional."

"Companies started paying the tax last month at a rate of $0.50 per user after the first 100,000 Chicagoans who log onto Snapchat, Reddit, Instagram and other popular sites, with city officials projecting a $31 million annual windfall for future mental health programs."

"Big Tech wants to nip the nation's first-ever enacted social media tax in the bud as several states, including Illinois, consider similar measures to wring money from companies to offset the public health threat many experts say their platforms can pose, especially for young people."

Chicago implemented a per-user tax on social media platforms at $0.50 per user after the first 100,000 Chicagoans, projected to generate $31 million annually for mental health programs. NetChoice, a tech trade group representing major companies like TikTok, Facebook, and X, filed a lawsuit challenging the tax as unconstitutional. The companies argue they function as publishers and cannot be singled out for taxation based on their broad audiences, comparing themselves to newspapers. Legal experts question the tax's constitutionality, citing a 1983 Supreme Court decision that blocked a Minnesota tax on newspapers. Several states are considering similar measures to offset public health concerns associated with social media platforms, particularly regarding youth mental health.

Read at Chicago Sun-Times