States are continuing to explore new ways to tax the digital economy, with proposals targeting digital advertising, data brokering, and consumer data collection.
Several measures are approaching key decision points. In Utah and Washington, digital advertising tax bills are awaiting gubernatorial action, with Washington’s proposal revisiting a law currently under litigation. Illinois is considering a 10% tax on large digital advertising revenues, while Minnesota is debating extending sales tax to certain advertising services.
Other states are taking different approaches. Kentucky has proposed a data broker tax as part of a broader revenue package, Nebraska is exploring a tiered tax on social media companies based on user data collection, and Michigan’s digital advertising tax proposal remains tied to ongoing budget negotiations.
Across states, these efforts reflect a broader trend: policymakers are working to modernize tax structures to capture digital activity, though approaches vary and continue to face debate.
FOCUS will continue to monitor how these proposals evolve.
