Rebuild Local News Praises Passage of Utah Tech Tax As Historic Breakthrough

The Utah legislature on Friday passed Governor Spencer Cox’s historic proposal to apply a tax on targeted advertising, especially by the largest tech platforms. The law is projected to generate tens of millions of dollars in the coming years and positions Utah as a national leader in exploring how tech-driven revenue could support civic and social initiatives.

If signed by Gov. Cox, as expected, Utah’s law would be the first in the world to explicitly connect a tech tax to supporting “civic information,” among other possible remedies to related harms.

Rebuild Local News President Steven Waldman issued the following statement:

“Utah’s landmark bill doesn’t mention local news – and yet could eventually powerfully help revive community media.

“The law codifies a key principle: Big Tech should help fix some of the problems they’ve helped cause. As Casey Snider, the Majority Leader of the Utah House, put it, the law asks them ‘to pay to put the pieces they break back together.’

“Community news is one of the pieces that need to be put ‘back together,’ one of the ‘harms’ partly caused by Big Tech. Local media collapsed when ad spending shifted from local news outlets to social media and search. It was encouraging that the legislation mentions teen mental health, child literacy and ‘civic information programs’ as possible eventual uses of funds.

“In addition, Gov. Cox has eloquently explained how tech companies help cause another harm – polarization. Any sensible strategy for countering polarization must include providing healthier civic information, in part through the revival of community news.

“This law would be the first one in the world that says tech companies should be taxed potentially to clean up information pollution.

Thank you Governor Cox and the Utah legislature for your gutsy and principled leadership on this cause.”

The bill, SB287, would assess a 4.7 percent gross revenue tax on companies that earn more than $100 million through “targeted advertising” and more than $1 million from such advertising within Utah. The state estimates that it would generate $15.2 million in fiscal year 2028 and $21.3 million in fiscal year 2029. If the law withstands the expected legal challenges from Big Tech, the legislature will later determine how to allocate the funds.

Governor Cox and the legislative champions designed the bill to avoid elements challenged in similar policies from other states. Maryland and Washington have each previously enacted taxes on digital advertising. Both faced legal challenges citing the federal Internet Tax Freedom Act, which prohibits discriminatory taxes on electronic commerce, and this bill is likely to face a similar challenge.

Utah’s approach taxes “targeted advertising,” which can occur in any medium – and not “digital advertising” alone – to avoid discriminating against the internet. The revenue thresholds were set high enough to avoid taxing traditional local media companies.

In addition, the bill does not prohibit taxed companies from disclosing passed-through costs to consumers, as Maryland’s law did, a provision that was struck down by the Fourth Circuit as a violation of the First Amendment.

“Governor Cox and Utah lawmakers have learned from the other approaches with a sensible policy well designed to withstand the inevitable legal challenges from Big Tech,” says Matt Pearce, Director of Policy for Rebuild Local News. “Taxing targeted advertising to mitigate its harms – a ‘polluter pays’ principle – is sound public policy, endorsed by Nobel Prize-winning economists Daron Acemoglu and Simon Johnson.”

The bill defines “targeted advertising” as the use of personalized data to sell advertising space through a bidding process and delivers ads to individuals through an interactive interface, including via links or QR codes.

In October 2025, Waldman published an op-ed in the Salt Lake Tribune suggesting that Utah assess a tech tax whose proceeds would support teen mental health and community media. Governor Cox later proposed a tech tax to support teen mental health and other youth programs.

Opponents of the legislation argued that tech companies would likely pass the cost of the tax on to Utah businesses. If that happens, Waldman says, “we’ve got the perfect solution: tax relief for small businesses that advertise locally.”

Similar ideas have been introduced elsewhere, including legislation in California by Sen. Steven Glazer in 2024 and a new federal bill by Rep. Jake Auchincloss, but those bills didn’t pass. Other states and countries have enacted tech taxes, but none have tied revenue to strengthening community news.

In supporting the bill, the Majority Leader of the Utah House, Casey Snider, said,
“Social media is not helping this country, it is tearing us down. The least we could do is ask them to pay to put the pieces they break back together in some form or fashion which is what this bill begins to do.”