We fight to make the internet safe for free enterprise and free expression.
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🚨NEW LAWSUIT: NetChoice Sues Illinois Over Unconstitutional Social Media User Tax and Digital Ad Tax
SPRINGFIELD, Ill. — NetChoice today filed two complaints against the State of Illinois to block enforcement of two newly enacted tax provisions, the Social Media User Tax and the Digital Ad Tax. Both measures unconstitutionally and discriminatorily single out digital services, in direct violation of the First Amendment and the federal Permanent Internet Tax Freedom Act (PITFA).
"Illinois’ new internet taxes firmly establish the state’s opposition to online speech, innovation, and its own business community,” said @Paul_Taske, Director of the NetChoice Litigation Center. “The Supreme Court has made abundantly clear that legislators cannot target a subset of media for disfavored taxation, but that’s precisely what these taxes do. Not only are they flatly unconstitutional under the First Amendment, but they blatantly disregard Congress’s clear judgment under PITFA that digital services cannot be subject to discriminatory taxation.”
A Tax on Audience Size Is a Tax on Speech
The Social Media User Tax imposes fees on platforms based on the number of Illinois users they reach, exempting services with fewer than 100,000 users while penalizing those with larger audiences. The U.S. Supreme Court has made clear that the government may not tax one category of speaker more heavily than another. 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.
Both Taxes Run Afoul of Federal Law
Both the Social Media User Tax and the Digital Ad Tax are in direct violation of PITFA, the federal law by which Congress expressly barred states from imposing "discriminatory taxes on electronic commerce." 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.
Real Costs for Illinoisans and Their Small Businesses
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. Local businesses, including restaurants, auto dealers, and community organizations, will also face higher costs to reach customers through online ads under the new Digital Ad Tax. This tax raises the cost of doing business, costs that are likely to be passed on to Illinois consumers, and harms entrepreneurs’ ability to grow.
Price-fixing & price discrimination are already illegal. What a “surveillance pricing” ban would add is a crackdown on marking down perishables at closing time and on loyalty discounts.
Regulators should enforce the laws they have before making new ones.
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Whole Foods is piloting AI-powered food recycling with Mill that uses computer vision to track, measure, and dehydrate back-of-house scraps. It cuts food waste volume by 80% and turns it into feedstock for local agriculture.
Learn more below ⏬️
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Virginia alone hosts hundreds of data centers that were built for cloud storage, telecommunications, & enterprise computing long before the AI boom.
Data centers are the infrastructure under everything Americans do online, and AI is just the newest layer on top. buff.ly/KuBvYF4
Marketplaces like Amazon put millions of third-party small sellers in front of their own customers, letting independent brands compete alongside the largest retailers. That’s what competition policy is supposed to encourage. buff.ly/2zzaXhm
A former coal plant site in Indiana could host 960 MW of new nuclear power. đź‘Ź
Amazon is funding development with X-energy & AEP, targeting 12 small modular reactors to serve the regional grid & Amazon’s data centers, creating 1,000+ construction jobs & 100+ permanent roles.
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Amazon agreed to pay the full cost of electric service for its $10 billion Montgomery County, MO data center campus, including the grid connection, with no rate discounts or incentives.
Neighbors aren’t picking up the tab, and the campus brings more than 400 permanent jobs. buff.ly/YMtt0DA
Google is putting its data center commitments in writing: pay for 100% of the power its facilities use, cover the direct cost of connecting them to the grid, & pay full real property taxes on new campuses. It’s also eliminating NDAs with state and local governments.
Voluntary standards like these are what responsible data center growth looks like. 👏datacenters.google/our-appro…
We need a regulatory standard that upholds American values of competitive freedom. Rather than micromanaging retail with overreaching policies, lawmakers should let the market do what it does best: innovate, adapt, and serve consumers.
Learn more below ⏬
Happy Free Speech Week! The First Amendment doesn’t have an exception for the internet, and NetChoice’s Litigation Center is in courts across the country making sure it stays that way.
Hear more from @Paul_Taske & other free speech experts today @AEI: buff.ly/gOddC0a
Streaming video makes up over half of all internet traffic, and one survey found the average American spends more than ten hours a day online.
Every stream, email, and bank transfer runs through a data center.
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Apparel brands used to guess at demand months out and discount or discard whatever didn’t sell. AI demand sensing now reads real-time sales and regional trends so brands make what shoppers actually want, reducing retail waste.
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A national financial market is being carved into 50 state rulebooks.
Twenty states are now in litigation over whether they can regulate prediction markets as gambling, and courts are split. New Jersey has asked the Supreme Court to decide. buff.ly/6bj9tFA
Starkey’s Omega AI hearing aid platform is modeled on how regions of the human auditory cortex work together. In testing, it delivered a further 28% gain in speech intelligibility, making noisy restaurants & classrooms far easier to navigate for those who are hard-of-hearing. buff.ly/iAKiBnl
Mobile banking is now the main way U.S. households access their accounts, nearly 9x more than a decade ago. Doctors can now pull up a patient’s history instantly instead of waiting on a faxed file.
Data centers have been powering all of it, long before AI became a headline. buff.ly/KuBvYF4
Children are the #1 target for identity theft. Digital ID mandates make hackers’ jobs even easier, handing them a honeypot of kids’ personal data.
Our Digital Safety Shield offers protection without the privacy risks: fund police, empower parents, & teach digital literacy. buff.ly/Dm7PfE4
A trader in Newark & a trader in Columbus now face different rules for the same contract on the same exchange. There is a circuit court split on whether states can apply their gambling laws to prediction markets, & now NJ has asked the Supreme Court to settle it.
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Data centers keep getting blamed for rising electric bills, but spending to replace aging infrastructure is the primary cause of current rate increases. Studies show large data centers shoulder a growing share of utilities’ fixed costs, easing charges on residential bills. buff.ly/E9MbeoJ
