Illinois Enacts Statewide Social Media Platform Fee

On June 16, 2026, Gov. J.B. Prizker signed the Illinois Fiscal Year 2027 Budget into law.  Included in the overall budget package that was signed into law is SB3019, which creates a statewide Social Media Platform Fee. Beginning January 1, 2027, certain social media platforms will be required to pay a monthly fee based on the number of Illinois users from whom they collect data. Unlike most taxes imposed on digital businesses, the fee is not based on income or advertising revenue. Instead, liability depends on the size of the platform’s Illinois user base. 

How Does the Fee Compare to Illinois’ Other Digital Taxes?

The Social Media Platform Fee was enacted alongside Illinois’ new Targeted Advertising Services Tax, but the two measures are calculated differently. The Targeted Advertising Services Tax imposes a 10% tax on gross receipts from targeted advertising services provided in Illinois and generally applies to providers with more than $1 million of Illinois gross receipts from those services during the preceding 12-month period. By contrast, the Social Media Platform Fee is based on the number of Illinois users from whom a social media platform collects data rather than the revenue generated from those users. 

The law also prohibits social media platforms from recovering the fee by charging different prices or offering different features, services, or in-app purchases based on a user’s geographic location. Individuals may bring a civil action for violations of this provision, and the statute prohibits mandatory arbitration of those claims.

The fee also differs from Chicago’s Social Media Amusement Tax, which became effective January 1, 2026. Although both measures rely on user participation rather than advertising revenue, the Illinois law applies statewide under its own fee schedule, reporting requirements, and enforcement provisions.

Overview of the Fee

Beginning January 1, 2027, social media platforms subject to the fee must submit a monthly report to the Illinois Secretary of State identifying the average number of Illinois users on the platform. The report is due within 14 days after the beginning of each month, and the monthly fee must be paid by the 14th day of the following month. 

The fee is calculated as follows:

Beginning January 1, 2028, the statutory fee amounts will be adjusted annually for inflation. The fee generally applies to social media platforms, which the statute defines as websites or internet mediums that allow users to create accounts, generate user-created content, and interact with content created by other users. Examples could include platforms such as Facebook, Instagram, X, TikTok, Snapchat, Reddit, LinkedIn, Pinterest, and YouTube, if they otherwise meet the statute’s requirements. Not-for-profit organizations are excluded. 

Enforcement and Compliance

The law includes several enforcement provisions. The Secretary of State may audit social media platforms, determine delinquencies, order payment, and pursue enforcement actions through the Illinois Attorney General or the appropriate State’s Attorney. 

One of the law’s most significant enforcement provisions is the additional charge imposed on platforms that fail or refuse to pay the required monthly fee. In those cases, the statute imposes an additional amount equal to 100% of the unpaid fee, together with any applicable penalties, each month until the fee is paid. 

Businesses subject to the fee should review how they identify Illinois users, maintain supporting records, calculate monthly user counts, and satisfy the statute’s reporting requirements.

Next Steps for Businesses

Although the law establishes the reporting and payment requirements, it does not establish detailed rules for determining who qualifies as an Illinois user, what constitutes a social media platform, or how user counts should be calculated.

Businesses that may be subject to the fee should begin evaluating whether they meet the statutory thresholds and whether existing systems can accurately identify Illinois users, calculate monthly user counts, and support the required reporting. Taxpayers should also monitor future guidance and legal developments as the effective date approaches.

Illinois’s Social Media Platform Fee is just one part of the increasingly complicated world of digital activity taxation. If you have questions about how this or other digital services taxes will impact you, contact a member of our team below.