"Platforms like Instagram and Facebook have allowed me to reach new customers, promote happy hours and weekend events, and remind regulars to keep coming back. We use paid social ads not because we’re a deep-pocketed national chain, but because they’re affordable and effective," Erik Forsberg writes. (Dreamstime)

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As a restaurant owner in the Twin Cities, I’ve built several businesses over many years through grit, hustle and early adoption of technology. Inside our restaurants we use Toast, and for marketing and advertising we use the most powerful tool: social media posts and ads.

Platforms like Instagram and Facebook have allowed me to reach new customers, promote happy hours and weekend events, and remind regulars to keep coming back. We use paid social ads not because we’re a deep-pocketed national chain, but because they’re affordable and effective. In today’s economy, they’re essential to every small retail and customer-service business.

That’s why I was disturbed to learn that some lawmakers in St. Paul want to tax these ads in Minnesota. It would be the first tax on social media in the United States. They claim it’s a way to make Big Tech “pay its fair share.” But here’s the truth: This tax won’t bother Elon Musk or Mark Zuckerberg — it’ll land squarely on the backs of small businesses like mine.

And here’s the kicker: It won’t even touch the most expensive advertising buys out there — like a $7 million Super Bowl commercial. Those will remain untaxed. Instead, it targets $3 and $5 ads on Instagram and Facebook — the very tools small businesses rely on every day to reach local customers.

Originally introduced during the regular legislative session as part of a broader package of revenue ideas, the social media tax proposal drew pushback from businesses, advocates and free-speech groups. While it was ultimately left out of the tax package being considered in May, it could resurface as legislators wrap up negotiations for a special session or in a future legislative session.

State Sen. Grant Hauschild, DFL-Hermantown, recently defended the idea (“If Big Tech mined like the Iron Range, it would pay its fair share,” May 12) by comparing tech companies to mining operations on the Iron Range. The analogy is clever, but it doesn’t hold up. Meta and X won’t use their money to pay the Minnesota Department of Revenue. They’ll be forwarding my money. That’s not an unintended consequence — it’s how digital advertising works. The cost of online ads will go up, and those costs will get passed along to the small businesses and entrepreneurs trying to grow a following, build a store or plumbing business, and hire.

I don’t say this to defend tech companies. I’d be happy to see more accountability and stronger protections for kids online. But this proposal isn’t that. It’s a money grab and a political stunt dressed up as populism. And it’s dishonest to pretend it won’t hurt Main Street employers.

At a time when small-business owners are already facing high inflation, workforce shortages, rising operating costs and economic uncertainty, a new tax on one of the most affordable ways we can market ourselves is truly bad policy.

The irony is that social media is one of the great equalizers for small businesses. It allows us to compete with big national brands without a massive marketing budget. You can run a campaign for $50 and drive foot traffic on a slow Tuesday night. You can reach customers by zip code, age, interest — or those who’ve visited your website before. Show me another platform that allows that kind of precision on a small budget.

I’m not asking for special treatment. I just want policymakers to understand how this actually works. If this tax passes, small businesses will pay more to reach their customers. Those folks will see fewer events, fewer specials, fewer reasons to come out and support local establishments. And ultimately, that hurts everyone — especially in cities like Minneapolis still working hard to rebuild post-pandemic.

I understand the desire to find new revenue and rein in technology firms. But this proposal misses the mark completely. It won’t rein in tech giants. It’ll just hamper small businesses that are already operating on razor-thin margins.

Minnesota can — and must — do better.

Erik Forsberg is a Twin Cities restaurateur and small-business owner.