Minnesota imposes new tax regulations on social media platform businesses

Minnesota's Senate Bill 3065 aims to impose a new tax on social media platform businesses that collect data from Minnesota consumers. Introduced on March 27, 2025, the bill seeks to address growing concerns over consumer privacy and the monetization of personal data by large tech companies.

The bill defines "consumer data" broadly, encompassing any information that can identify or be linked to a Minnesota resident. It targets for-profit social media platforms that engage with over 100,000 Minnesota consumers monthly, placing the onus on these businesses to prove that consumers are not residents of the state. This provision is designed to ensure accountability and transparency in how consumer data is handled.

Key provisions include a tax structure that allows social media businesses to claim credits for taxes paid in other jurisdictions, thereby preventing double taxation. The bill also mandates strict recordkeeping requirements for these companies, ensuring that they maintain accurate data on their Minnesota consumer base.

Debate surrounding Senate Bill 3065 has been robust, with proponents arguing that it will enhance consumer protections and generate revenue for the state. Critics, however, express concerns about the potential burden on businesses and the risk of driving tech companies away from Minnesota. Some experts warn that the tax could lead to increased costs for consumers as businesses may pass on the expense.

The implications of this legislation are significant. If passed, it could set a precedent for how states regulate data privacy and taxation in the digital age, potentially influencing similar measures across the country. As the bill moves through the legislative process, stakeholders from various sectors are closely monitoring its progress, anticipating both economic and social impacts on the state's tech landscape.

In conclusion, Senate Bill 3065 represents a pivotal step in Minnesota's approach to consumer data protection, balancing the need for privacy with the realities of a digital economy. As discussions continue, the outcome of this bill could reshape the relationship between consumers, businesses, and the state in the evolving digital marketplace.