Illinois’ new Social Media User Tax and Digital Ad Tax firmly cement the state’s position as anti-speech, anti-innovation, and anti-internet freedom. These taxes stand in direct opposition to federal law, violate the First Amendment, and raise a host of other constitutional problems. NetChoice is suing to prevent Illinois from demoting online speech to second-class status.
NetChoice sued on September 11, 2026, to ensure protected online content is able to flourish without unconstitutional burdens. Read the complaint against the Social Media User Tax here, and read the complaint against the Digital Ad Tax here.
The Supreme Court has made it clear that the First Amendment does not “go on leave” when social media is involved. The Social Media User Tax targets media companies for disfavored tax treatment based on audience size. In Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue, the Supreme Court struck down a similar tax on paper and ink that applied only after publishers exceeded $100,000 in expenditures. The Court found that exempting smaller publishers while discriminating based on circulation size violated the First Amendment.
By exempting online services with fewer than 100,000 users while penalizing those with larger audiences, the tax creates a “disfavored” category of media companies based purely on their reach. Taxing a service based on its “active users” is a direct tax on the medium of speech and the community connection that these services facilitate. That discrimination violates the First Amendment. Illinois’ Social Media User Tax follows the same blueprint NetChoice is already challenging in NetChoice v. Chicago, a pending suit over the city’s own per-user Social Media Amusement Tax.
Furthermore, under the Permanent Internet Tax Freedom Act (PITFA), Congress explicitly prohibited states from imposing “discriminatory taxes on electronic commerce.” Both the Social Media User Tax and the Digital Ad Tax are in direct violation of PITFA. Both taxes apply exclusively to online services while leaving comparable offline counterparts — social clubs, community centers, professional associations, and traditional advertising — untouched. This is precisely the sort of digital-only taxation Congress intended to preempt, and similar laws, including Maryland’s Digital Advertising Tax, have already been struck down by courts on comparable grounds.
Both taxes hurt Illinoisans and their businesses. The Digital Ad Tax hurts small businesses, including restaurants, auto dealers, and community organizations, by increasing costs or limiting access to vital online marketing and communication tools relied on by local small businesses to compete against their much larger competitors. Additionally, because the Social Media User Tax is a flat fee untethered to a company’s actual revenue or profit in Illinois, some services may choose to limit or exit the Illinois market altogether — cutting residents off from vital communication, educational, and community-organizing tools they rely on daily.