Counterpoint: Proposed tax on social media platforms would hurt small businesses

"In 2001, after I was laid off from my corporate job, my wife and I started a business selling custom-embroidered hats and shirts to local businesses. Equipped with a single embroidery machine, a bulky desktop computer and a lot of determination, we launched the business from our basement. Five years later, we shifted to an e-commerce model - and today, we operate from a state-of-the-art facility just outside Minneapolis. From there, our 28 employees annually ship hundreds of thousands of logo-embroidered items - ranging from sweatshirts and ball caps to aprons and tote bags - to businesses and organizations nationwide."

"But like many online-only retailers, our success ultimately depends on affordable digital ads that allow us to tell the right audience about our products. So it's worrying that Minnesota lawmakers are considering two bills, SF 5052 and SF 4787 (and companion bill HF 4343), that would drive up the cost of digital advertisements - making it harder for us to grow, compete with bigger companies, and succeed."

"The first bill, SF 5052, aims to strike a blow at big social media companies, but it would end up hurting Minnesota small businesses. SF 5052 would tax social media companies based on the number of Minnesota users whose data they collect. The problem is, the social media companies would simply pass along the cost of the new tax to small businesses like mine that advertise on their platforms. That would leave us with three bad options: We could absorb the cost of the new tax, eroding our margins; purchase fewer ads, hurting our growth; or raise our prices, slowing our sales among our increasingly cost-conscious clientele."

"The second bill, SF 4787, would likely prove even more damaging. SF 4787 would tax all digital ads, along with related services like digital ad design and consulting. That would be terrible news for ma"

A custom embroidery business began in 2001 after a corporate layoff, starting from a basement with one machine and basic equipment. The business later moved to an e-commerce model and now operates from a modern facility near Minneapolis with 28 employees shipping hundreds of thousands of logo-embroidered items nationwide. Growth depends on affordable digital ads to reach the right customers. Proposed Minnesota bills, SF 5052 and SF 4787 with a companion bill HF 4343, would increase the cost of digital advertising. SF 5052 would tax social media companies based on Minnesota user data, and those costs would likely be passed to small advertisers. SF 4787 would tax digital ads and related services, further increasing costs and harming small businesses.

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