In the final hours of the 2026 spring legislative session, the Illinois General Assembly passed a tax omnibus bill (Senate Bill [SB] 3019), containing three new taxes: the Targeted Advertising Services Tax, a digital asset tax, and a social media platform fee.
While I could spend this column going into the many reasons why I believe these new taxes represent bad tax policy (full disclosure: I testified in opposition to the taxes in front of the Illinois House Revenue and Finance Committee), I’ll instead provide a quick overview and leave the judgment up to you and the courts.
This tax imposes a 10% tax on the gross receipts from targeted advertising services in Illinois. Specifically, the tax will be imposed on providers of targeted advertising services whose annual cumulative gross receipts from targeted advertising services provided in Illinois during the previous 12-month period exceeded $1 million.
According to SB 3019, “‘Targeted Advertising Services’ is defined as any programmatic written, oral, or graphic statement of representation conveyed through a digital interface or any other method of delivery.” In other words, the tax will be imposed on:
One of the thorny issues in implementing this tax will be determining the location of “user-consumer,” aka the person viewing the ads. SB 3019 requires a provider of targeted advertising services to determine the location “using the totality of the user-consumer contact information within the provider’s possession or control.”
The tax will be administered and collected by the Illinois Department of Revenue (IDOR). Providers of targeted advertising services will be required to register with IDOR, and tax returns will be due monthly on the 20th of the month for the preceding calendar month.
Notably, there’s a prohibition of the imposition of local targeted advertising taxes by home rule units, which is likely targeted at the City of Chicago.
This tax will be imposed on the privilege of receiving any digital asset business activity by a customer in this state at a rate of 0.2% of the digital asset’s value. “Digital asset business activity” means exchanging, transferring, or storing a digital asset as part of a business or on behalf of a customer who’s entered into an agreement with a business for the provision of those services. Digital asset brokers are required to collect the tax on each sale.
The term “digital asset” is defined in the Digital Assets and Consumer Protection Act (205 ILCS 731/1-5) as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not fiat currency, whether or not denominated in fiat currency.”
SB 3019 provides that the term “in this State” means at a physical location in Illinois for a sale occurring in person. For a sale occurring electronically or by phone, the statute creates a rebuttable presumption that a customer is located in this state if the customer’s contact information on record or available to the digital asset broker indicates an Illinois mailing address “or an Illinois internet protocol address or other user-consumer data showing ‘place of primary use’ in Illinois as defined in the Mobile Telecommunications Sourcing Conformity Act.”
Like the Targeted Advertising Services Tax, this tax will be administered and collected by IDOR. Digital asset brokers are also required to register with IDOR, and tax returns will be due monthly on the 20th of the month for the preceding calendar month.
The Business Corporation Act of 1983 was amended to impose a new social media platform fee at graduated rates. This new fee will be administered and collected by the Office of the Illinois Secretary of State’s Department of Business Services.
SB 3019 defines “social media platform” as “a website or internet medium that permits a person to become a registered user, establish an account, or create a profile for the purpose of allowing users to create, share, and view user-generated content through that account or profile.”
Beginning Jan. 1, 2027, and monthly thereafter, each social media company will be required to submit a report on the average number of monthly users of its platform located in Illinois. These reports are due within 14 days of the start of each month.
Fees paid will be based on the number of users a social media platform in Illinois has. For instance, social media platforms with:
Of course, the statute is unclear as to how Illinois users will be determined. Additionally, the fees are indexed to inflation and will increase each year beginning in 2028 based on increases in the consumer price index.
The secretary of state has the authority to order a social media platform to pay the fees, determine the amount of the fee, determine delinquency, and audit a social media platform to enforce the law.
The statute prohibits social media platforms from passing the cost of the fee to users and authorizes a private right of action to enforce this provision. The statute also forbids social media platforms from requiring users to accept mandatory arbitration of a claim arising under this provision.
All in all, these three new taxes are scheduled to take effect on Jan. 1, 2027. Of course, whether they survive the legal challenges ahead is another story.
