On June 16, 2026, the Illinois Governor JB Pritzker signed Senate Bill 3019, previously passed by the General Assembly on June 1, which enacted budget-related tax legislation effective January 1, 2027, that significantly expands taxation of digital and data-driven business activities. Additionally, the newly enacted bill introduces a series of tax and fee changes that will take effect on July 1, 2026, alongside a short-term consumer tax relief measure.

New Tax Measures for Digital Services and Platforms

Under the recently signed legislation, starting on July 1, 2026, responsibility for tax collection will shift to hotel booking platforms, which will be treated as marketplace facilitators. This will require them to collect and remit applicable taxes on hotel reservations processed through their systems. Additionally, a 15% privilege tax on receipts generated from fantasy contest activities, effectively taxing operator revenues from paid fantasy sports competitions, will start applying from the same date.

Furthermore, the bill introduces a 10-day sales tax holiday in August 2026. This provides a limited period during which qualifying retail purchases are exempt from sales tax, aiming to provide short-term consumer relief and stimulate spending.

In addition, starting January 1, 2027, a new 10% tax on gross receipts from targeted advertising services will be introduced. The 10% tax will apply to providers whose Illinois-derived advertising revenues exceed USD 1 million over 12 months, with liability assessed quarterly.

Social media platforms that have more than 100,000 Illinois users from whom they collect data will be required to pay a monthly fee and report the average monthly Illinois users to the Secretary of State within 14 days after the start of each month. 

Also, a 0.2% privilege tax on the value of digital asset business activity involving Illinois customers will be introduced at the beginning of 2027. The 0.2% privilege tax will apply to digital asset brokers with a physical presence in Illinois, as well as remote brokers that exceed a USD 100,000 gross receipts threshold in Illinois, effectively extending the tax net to both in-state and out-of-state operators.

Conclusion

The budget-related tax legislation represents a broader policy shift toward taxing digital services and data monetization based on user location and economic presence rather than traditional physical nexus. Both in-state and out-of-state advertising companies should assess whether their operations fall within the scope of “targeted advertising services.”  

Social media platform operators need to determine whether they meet the threshold for the new monthly user-based fee, and firms operating in the digital asset space must evaluate whether their activities qualify as “digital asset business activity” subject to the new 0.2% privilege tax.