The Chicago Social Media Amusement Tax violates free speech rights, discriminates against companies, violates federal law, and harms Chicago residents and their businesses.
NetChoice sued on March 13, 2026, to ensure protected online content is able to flourish without unconstitutional burdens. Read the complaint here.
This short-sighted tax proposal will ultimately hurt Chicago consumers and small businesses. The costs will be paid by local businesses advertising on digital services and everyday Chicagoans using them to connect, communicate, and operate. Increased costs for online services will mean higher marketing costs for local artists, designers, restaurants, services and more.
The Supreme Court has made it clear that the First Amendment does not “go on leave” when social media is involved. The 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.
Furthermore, under the Permanent Internet Tax Freedom Act (PITFA), Congress explicitly prohibited states from “discriminatory taxes on electronic commerce,” which includes taxes that are not imposed at the same rate on similar non-digital transactions. This tax exclusively targets online services while exempting comparable offline venues like social clubs, community centers, and professional societies that provide similar networking services. PITFA does not allow this.
Our Team
Paul Taske
Court Filings
NetChoice’s Complaint, filed on March 13, 2026, in the Circuit Court of Cook County Illinois.