We urge Governor Pritzker to veto two tax provisions in Senate Bill 3019 — a social media user tax and a digital advertising tax — both of which are unconstitutional on multiple grounds, including federal preemption, First Amendment violations and Commerce Clause issues.
NetChoice Veto Request Letter to Gov. Pritzker on Illinois Senate Bill 3019
June 2, 2026
The Honorable JB Pritzker
Governor of Illinois
Office of the Governor
207 State House
Springfield, Illinois 62706
Dear Governor Pritzker:
On behalf of NetChoice, a trade association of leading internet businesses committed to promoting free enterprise and free expression online, I write to respectfully but urgently request that you use your amendatory veto authority to remove the social media user tax and the Targeted Advertising Services Tax (digital ad tax) included in Senate Bill 3019. Both provisions are constitutionally and legally defective, will impose real harm on Illinois residents and businesses and will generate costly litigation far outweighing any projected revenue.
We know this with particular certainty because NetChoice is already litigating these exact legal questions against an identical tax, right now, in Cook County. The state legislature has just enacted a near-carbon copy of a tax we filed suit to block on March 13, 2026.
NetChoice is Already Suing to Block Chicago’s Identical Tax
In December 2025, Chicago enacted its Social Media Amusement Tax (SMAT) — a $ 0.50-per-user monthly fee on social media platforms with more than 100,000 Chicago users. NetChoice filed suit to block that tax on March 13, 2026, in the Circuit Court of Cook County, in the case NetChoice v. City of Chicago. That litigation is active and ongoing. The state’s new social media user tax in SB 3019 is structured on the same legal framework, covers the same platforms and raises the same legal infirmities. The only difference is scale.
Our complaint in Cook County asserts four grounds for invalidity — each of which applies with equal force to the state tax you have been asked to sign:
- Federal preemption under PITFA. The Permanent Internet Tax Freedom Act prohibits discriminatory taxes on electronic commerce — taxes that target online services while exempting comparable offline ones (Permanent Internet Tax Freedom Act, Pub. L. No. 114-125, 130 Stat. 122 (2016); 47 U.S.C. § 151). Chicago’s SMAT taxes social media platforms while leaving offline social venues untaxed. SB 3019’s state tax does exactly the same thing. Congress enacted PITFA precisely to prevent this kind of discrimination.
- First Amendment violations. Both the Chicago and state taxes impose differential burdens on media companies based on audience size — exempting smaller platforms while penalizing popular ones. The Supreme Court struck down this exact structure in Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue (1983), where Minnesota taxed newspapers only after they exceeded a spending threshold (Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue, 460 U.S. 575 (1983)). The Court found that singling out publishers based on circulation size violated the First Amendment. As the Supreme Court has reaffirmed in recent terms, the First Amendment does not “go on leave” when social media is involved (Moody v. NetChoice, 603 U.S. ___ (2024) (Justice Kagan)).
- Illinois Constitutional violation. Our Cook County complaint also argues that Chicago’s SMAT constitutes an unauthorized occupation tax not sanctioned by the General Assembly — and that social media does not qualify as an “amusement” under Illinois law because it is used for many non-amusement purposes, is measured by data collection rather than consumer engagement and is not a physical “place” of amusement. While the state legislature has broader taxing authority than the City of Chicago, the underlying legal characterization problems carry over to SB 3019.
- Commerce Clause. Both taxes fail the internal consistency test: if every jurisdiction imposed an identical per-user tax, multiple taxation would result, disadvantaging interstate commerce. A student domiciled in New York attending a Chicago university could be considered a “resident” in both jurisdictions, resulting in double taxation. The state tax compounds this risk significantly given its statewide reach.
NetChoice is seeking a court order declaring the Chicago tax illegal and unconstitutional. That case has not been resolved. Signing SB 3019 into law would mean Illinois enacting a near-identical tax while the legal validity of the Chicago version remains an open question in court.
The Social Media Tax also Mandates Invasive Data Collection
Compliance with SB 3019’s social media tax would require platforms to track and verify the Illinois residential addresses of active users — data collection that goes well beyond what users have consented to provide and that may conflict with existing Illinois privacy law, including the Biometric Information Privacy Act. Illinois has been a national leader in privacy protection. This tax would undermine that leadership by mandating intrusive data collection and creating new security vulnerabilities for residents.
The Digital Advertising Tax is Similarly Defective
The Targeted Advertising Services Tax suffers from the same fundamental legal infirmities — and the General Assembly itself acknowledged this by declining to budget for any revenue from it in FY27, openly stating the goal was to create a framework to implement later if the social media tax survives court review. We agree with that implicit concession and urge you to veto it rather than enact a provision its own sponsors do not expect to survive legal scrutiny.
The tax applies exclusively to advertising on digital interfaces while completely exempting print, television, radio and billboards. This disparity is facially discriminatory under ITFA. Importantly, the Illinois Supreme Court already invalidated a materially similar measure in Performance Marketing Association v. Hamer, finding that a tax on online performance marketing that did not apply to print performance marketing was expressly preempted by ITFA (Performance Mktg. Ass’n v. Hamer, 2013 IL 114496 (Ill. 2013)). That controlling precedent from Illinois’s own courts should give serious pause here.
Second, the bill’s apportionment formula — based on the ratio of in-state to national digital advertising revenue — creates significant risk of multiple taxation in violation of ITFA’s prohibition. With Maryland having enacted a similar tax and other states considering comparable legislation, many transactions could be taxed by multiple states without any credit provisions.
Finally, the tax also fails the four-part test under Complete Auto Transit v. Brady (Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977)). Its apportionment formula does not adequately establish substantial nexus with Illinois activity, discriminates against electronic commerce relative to traditional advertising and bears no fair relationship to state services provided. These constitutional deficiencies mirror those that have led courts to invalidate similar measures in other states.
Both Taxes will Harm Illinois Residents, Small Businesses and Workers
The legal deficiencies of these taxes are serious enough standing alone. But even setting the law aside, both taxes will impose real-world harm on residents they are not intended to target.
The social media tax’s flat per-user fee, disconnected from any platform’s actual revenue or profit in Illinois, will be passed directly to consumers through higher subscription fees or charges for services currently provided free. Platforms unable to absorb the cost may exit the Illinois market entirely, cutting residents off from vital communities, educational resources and business services. Auto dealers, restaurants promoting daily specials, community organizations coordinating volunteers and Chicago artists reaching audiences would all face higher costs or reduced access.
The digital advertising tax will fall hardest on small businesses. Illinois entrepreneurs, retailers, restaurants, nonprofits and community organizations that rely on digital advertising to compete locally and nationally would face sharply higher costs, which will inevitably be passed to consumers through higher prices and absorbed by workers through reduced hiring and delayed expansion. Large platforms are unlikely to absorb a 10% increase in advertising costs; small businesses will not be able to. Minnesota and Washington considered similar proposals and abandoned them after recognizing the legal risks and economic harms. Illinois should reach the same conclusion before, not after, costly litigation.
NetChoice is already in court fighting these exact legal battles on behalf of Chicago residents. Signing SB 3019 into law with these two taxes would replicate those legal vulnerabilities at the state level, and impose real harm on Illinois residents and small businesses — all before a single dollar of sustainable revenue is collected.
We understand the difficult fiscal environment Illinois faces and respect the legislature’s effort to address it. But these two provisions will not solve it. They will generate lawsuits, compliance costs, reduced services and reputational damage that far exceed any revenue gained. We respectfully urge you to veto the social media user tax and the Targeted Advertising Services Tax included in SB 3019. NetChoice stands ready to work with your office and the General Assembly on lawful, sustainable alternatives.
Sincerely,
Amy Bos
Vice President of Government Affairs
NetChoice (The views of NetChoice expressed here do not necessarily represent the views of all NetChoice members.)
NetChoice is a trade association that works to make the internet safe for free enterprise and free expression.