Illinois’ Social Media Tax Is A Modern Stamp Act — And Just As Doomed

from the not-how-any-of-this-works dept

England imposing the Stamp Act on the American colonies back in 1765 was one of the final moves that pushed those colonies into open revolt for their independence. The law sought to tax printed communications, and England justified it by saying it was needed to pay for British soldiers in the colonies. That it also made it more expensive for agitators among the colonies to speak out was, I guess, just a side benefit.

In the US we don’t look too kindly on such things. In Minneapolis Star vs. Commissioner, the Supreme Court made it clear that Minnesota’s attempt to put a stamp tax on newspapers was similarly unconstitutional, as a tax on the media that was specifically targeted at their activities of publishing First Amendment protected speech. As Justice Sandra Day O’Connor made clear, singling out media for a tax was a tax on their speech and thus prohibited under the First Amendment:

When the State singles out the press, though, the political constraints that prevent a legislature from passing crippling taxes of general applicability are weakened, and the threat of burdensome taxes becomes acute. That threat can operate as effectively as a censor to check critical comment by the press, undercutting the basic assumption of our political system that the press will often serve as an important restraint on government.

Apparently the Illinois legislature and Governor JB Pritzker are either unaware of how the First Amendment works, or they just don’t care. Because they just passed a straight up tax on social media based on how many Illinois residents are using the service.

Almost everyone who looks at this is pointing out that it’s obviously, blatantly, unconstitutional. And Pritzker himself admitting that he’s targeting social media companies for this tax to punish them for supposed (but still unproven) harms caused to kids makes it even worse, as First Amendment lawyer Ari Cohn points out:

In case you can’t see that image, it’s Ari calling out JB Pritzker for directly saying that this tax is about “protecting our kids” and punishing “big tech” which is an admission that this tax is not a general tax, but a specific one on a specific media industry to punish them for their First Amendment-protected editorial decisions. I guess, thanks Governor Pritzker for providing more evidence for the court.

Even the traditional media, which usually loves to slam social media and tends to cheer on any law that tries to regulate it — no matter how constitutionally dubious — is asking what the fuck Illinois is thinking. The Washington Post has pointed out that the law is shockingly stupid:

The bill, for example, fails to properly define the very unit that triggers the tax: “Illinois users.” Does that distinction only apply to full-time residents, or every last social media visitor who has a layover at O’Hare? If a “user” is someone with a tenuous connection to the state, like a traveler, the law might run into challenges under the Constitution’s commerce clause.

The bill isn’t even clear about what qualifies as a “social media platform.” The legislation broadly defines it as an online service that allows users to create accounts, share and generate content, and interact with content created by others. Zealous enforcers could claim that’s almost any site on the internet.

While the policy would certainly apply to platforms like X and Instagram, it might also include anything from a hiking app to a dating service.

AllTrails might not consider itself a “social media platform,” but that assumption comes at a high risk. The bill imposes astronomical penalties for noncompliance. The state can double the amount owed and continue adding penalties every month until the company coughs up the fees.

The Chicago Tribune similarly points out that the law won’t just apply to Meta and X, but to lots of other random companies who may not even realize it yet:

Where’s the line between “social media” and “something else”? Legislative authors’ definition — that the service must “primarily serve” as a medium for users to interact with content generated by other users — is sweeping. So the law also leaves room for debate about which online services — Yelp? Nextdoor? Substack? Snapchat? Tinder? Ring? Reddit? BeReal? — qualify as “social media” platforms, offering little guidance on how regulators should make these determinations.

The law is beyond vague.

And that’s before we even get to the part where this law effectively requires platforms to track and surveil their users’ locations just to figure out who counts as an ‘Illinois resident.’

Pritzker and friends can celebrate the budget math all they want. The First Amendment doesn’t care about Illinois’s fiscal problems, and neither will the courts. The colonists who revolted over the original Stamp Act at least had to wait years for the courts to vindicate them. Pritzker has helpfully accelerated the timeline by going on the record explaining that the whole point of this tax is to punish tech companies for their editorial choices. Illinois is going to spend real money defending a law that its own governor torpedoed in a tweet.

Filed Under: 1st amendment, free speech, illionois, jb pritzker, social media tax, stamp tax