New legislation to tax Big Tech’s digital advertising considered by PA House committee
Pennsylvania House Democratic Caucus April 29, 2026 | 4:22 PM
HARRISBURG, April 29 - The PA House Finance Committee today considered H.B. 1678, new legislation that would tax revenue derived from digital advertising platforms. The bill, known as the Digital Ads Tax, was introduced by state Reps. Elizabeth Fiedler, D-Phila., Aerion Abney, D-Allegheny, and John Inglis, D-Allegheny.
House Bill 1678 would extend the existing gross receipts tax -- a 5% tax already paid by telecommunications and other industries -- to revenue from digital advertising platforms, which sell ad space on websites and apps. Digital ads subject to the tax would include banners, search engine results, and full-screen interstitial ads.
The vast majority of the tax will be paid by the wealthiest Big Tech corporations, including Google, Meta, Amazon, TikTok, and Microsoft, the sponsors said.
“Working people are struggling under the weight of the rising cost of groceries, gas, and housing, but still manage to pay their taxes. This legislation calls on some of the biggest corporations in the world to pay their fair share,” said Fiedler. “This legislation doesn’t cost people in Pennsylvania a penny. But with investment by these huge for-profit corporations, we can fund the infrastructure we all count on: roads, bridges, schools, and transit.”
“I appreciate Chair Fiedler for introducing this legislation and thank the members of the committee for their thoughtful discussion on the proposal today,” said state Rep. Steve Samuelson, chair of the House Finance Committee. “My goal is to have the committee consider this legislation as soon as early June.”
“I fully support a digital advertising tax because it is only fair that corporations pay taxes on the massive ad campaigns they are funding, which are often an inconvenience to those who experience them. Implementing this tax ensures that Pennsylvania fairly generates more revenue for statewide services and programs from the record profits many of these corporations are enjoying at the expense of our citizens,” said Inglis.
Maryland, Utah, and Washington have all passed similar legislation.
“Right now, companies like Google, Meta, Amazon, and Microsoft are making billions off our personal data, flooding our screens with ads that most people don’t even want -- and they’re not paying taxes on that revenue. That’s a massive, fast-growing industry, and none of that money is coming back to support our communities. A digital advertising tax would let Pennsylvania capture some of that value and invest it in things people actually need, like schools, transit, and housing,” said Abney.
House Bill 1678 comes at a critical time for Pennsylvania, as the legislature prepares to begin negotiations for the 2026–27 state budget due on June 30. Facing steep federal cuts to social services like SNAP and Medicaid, the commonwealth needs new, creative revenue streams to fund vital resources and programs.
The digital ads industry is projected to be worth $1 trillion in just five years. This tremendous profit has escaped taxation for years because the state Tax Code has not kept up with digital business and services. One analysis estimates that this legislation could raise up to $624 million in 2027 alone.
If implemented, it would also represent a shift in Pennsylvania’s tax structure, which is considered to be one of the most regressive in the nation. Currently, the poorest Pennsylvanians pay more than double the rate of the wealthiest.
The committee heard testimony from experts who spoke about the proposal’s potential to improve Pennsylvania’s existing tax structure.
“H.B. 1678 is a strategic revenue solution that modernizes the state Tax Code to capture the booming revenues of the 21st century digital economy that could not exist without the extraction of our personal data,” said Gabriela Noa Betancourt, research director of the Action Center on Race and the Economy.
“H.B. 1678 is a commonsense policy solution to the challenge posed by large, networked companies that do not pay much in taxes themselves and actually undermine other taxes, such as the sales tax. This fair and efficient proposal fits comfortably within Pennsylvania’s current tax system and is wholly consistent with the state’s legal powers in our federalist system,” said Darien Shanske, professor at the University of California, Davis School of Law and digital advertising tax expert.
In the Pennsylvania House, H.B. 1678 has 49 co-sponsors. State Sens. Lindsey Williams, Katie Muth, and Nikil Saval have introduced companion legislation in the state Senate. The bill is part of the “Tax Billionaires. Fund PA” package.