Recent news reports suggest Chicago is considering a new social media advertising tax. This would be part of the city’s broader efforts to close the city’s project $1.1 billion budget shortfall for the fiscal year 2026. Few clear details have been shared regarding this potential change, but Chicago Mayor Brandon Johnson did express concern about the “billions of dollars” generated through digital industries and suggested that free social media advertising is widespread and under-taxed.

The bottom line: Digital advertising agencies, social media platforms, and businesses running social media ad campaigns in Chicago should monitor developments as the mayor's budget address this fall may provide concrete proposals for this potential new tax.