Chicago Social Media Tax Likely to Spur Big Tech Legal Challenge
January 20, 2026
Bloomberg Tax
Partner Jeff Friedman is quoted in Bloomberg Tax discussing Chicago’s new Social Media Amusement Tax (SMAT). Jeff calls the levy “bad tax policy” that will lead to years of litigation and ultimately fail to generate revenue. He argues that the tax is preempted under the Supremacy Clause and the Internet Tax Freedom Act because it imposes a discriminatory burden on electronic commerce. Jeff also notes that, unlike Chicago’s earlier streaming tax upheld in prior litigation, there is “no taxable comparison” for social media platforms which makes the new tax especially vulnerable to challenge.
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