Chicago's $31 Million Social Media Tax Faces Legal Battle, Experts Predict Unconstitutionality

Chicago Mayor Brandon Johnson's proposed "Social Media Amusement & Responsibility Tax" (SMART), intended to generate $31 million to help close the city's $1.15 billion budget shortfall and fund mental health services, is facing strong predictions of legal defeat. Unveiled as part of his 2026 budget on October 16, 2025, the tax would levy 50 cents per user per month on social media companies like Meta and TikTok, exempting the first 100,000 users. The mayor's office contends this is a legal "amusement tax," drawing parallels to taxes on "addictive vices" like nicotine and tobacco.

However, constitutional law experts are vocal in their skepticism. Martin Redish, a constitutional expert at Northwestern University, predicted the tax would end up "a complete loser" if challenged in court. Amy Bos, Vice President of Government Affairs at NetChoice, an industry trade association representing major tech companies, stated the proposal is "on its face, frankly it’s unconstitutional," citing a 1983 Supreme Court ruling that prohibits singling out media for special tax treatment.

Mayor Johnson has defended the proposal, asserting, "Just like we tax other addictive vices that are bad for our health, like nicotine and tobacco, it is far past time we treat social media companies the same way." Despite this, senior mayoral adviser Jason Lee has acknowledged potential difficulties in tracking user numbers without the cooperation of social media companies. City budget director Annette Guzman maintains confidence in the Department of Law's assessment of the city's legal standing.

While the tweet mentioned similar tax structures floated in Minnesota and Washington state, Chicago's direct per-user social media tax is largely unprecedented in the United States. Other states have explored digital advertising taxes, which have also encountered significant legal challenges. Chicago itself has a history of expanding its amusement tax to digital services, with a Cook County Circuit Court ruling in 2018 upholding its application to internet-based streaming services despite previous legal battles.

The social media tax is a key component of Mayor Johnson's "Protecting Chicago" budget, which also includes a revived corporate "head tax" and an increased "cloud tax" on tech companies, all designed to avoid property tax hikes for residents. The administration aims to position these measures as requiring "the ultra-rich" and corporations to contribute more to the city's financial stability. The anticipated legal battle over the social media tax could significantly impact the projected $31 million in revenue.