Social media faces new tax as Washington targets youth mental health crisis
Apr 7, 2025, 2:20 PM | Updated: 2:27 pm

Hand hovers over social media apps. (Getty Images)
(Getty Images)
Starting in 2026, companies that profit from social media in Washington state will be required to help pay for the growing cost of youth mental health care. That鈥檚 the goal of , which had its first public hearing on Monday in front of the House Finance Committee.
It would impose a new tax on social media platforms and direct the money into a dedicated fund for behavioral health services aimed at young people.
A fiscal note tied to the bill estimates the tax could raise $45 million over the next six years. Lawmakers are currently seeking out new ways to fund their priorities in light of a predicted $16 billion budget deficit, and this would be one of those new ideas.
The proposal adds a 0.4% business and occupation (B&O) tax on the gross income of companies that operate social media platforms in the state. That鈥檚 in addition to any taxes they already pay under the existing B&O system.
The revenue from this new tax won鈥檛 just disappear into the state鈥檚 general fund. Instead, it goes into a newly created Youth Behavioral Health Account, a kind of lockbox fund dedicated exclusively to programs and services for children, teens, and young adults 鈥 specifically those in the prenatal stage through age 25.
New social media tax would fund mental health care
The money would fund a wide range of efforts: behavioral health services identified by the state鈥檚 strategic plan for youth mental health; a pilot program bringing telehealth therapy to schools; and support for complex cases that involve multiple systems like health care, education, and child welfare.
The bill also includes funding for a newly created Chief Officer of Youth Behavioral Health within the Governor鈥檚 office 鈥 a position tasked with coordinating and improving behavioral health care for young people.
A companion bill in the Senate, , has yet to have its first public hearing in the Senate Ways and Means Committee.
Representative Lisa Callen (D-Snoqualmie), the bill’s main sponsor, said Monday the legislation aimed at addressing the negative impacts of social media on youth behavioral health, citing data from the Washington State Healthy Youth Survey showing high social media use and problematic internet use among youth.
“Forty percent of 8th graders that responded, 47% of 10th graders, and 50% of 12th graders self-reported problematic internet use, experiencing increased social anxiety and feeling withdrawal when away from the internet,” Callen said. “They are losing motivation to do other things that they need to do. So that’s kind of the description of the problem.”
The need for early intervention
She emphasized the need for early intervention to reduce long-term therapy needs and proposed partnerships with social media companies and the business community to invest in prevention and well-being services.
Dr. Stephan Blanford, Executive Director of Children’s Alliance, testified in support of HB 2038, saying the state currently ranks 48th in the nation in youth mental health, meaning the state has some of the lowest number of access points to mental health care with the highest prevalence of youth living with mental health challenges.
“One in eight Washington eighth graders have made a suicide plan in the last year, and 64% of youth with anxiety or depression are not receiving any care at all,” he said. “We support this bill because social media use amongst teens has worsened this crisis.”
Various speakers, including representatives from TechNet and the Washington Retail Association, testified against the bill, highlighting the importance of addressing youth mental health but the possible legal challenge the bill could result in.
“We believe the bill will violate the permanent . It singles out social media companies while exempting other online services like messaging apps and online gaming,” says Rose Feliciano of TechNet, an industry lobbying group. She argued the Act says taxes on internet companies must be imposed equally without discrimination based on what the company’s product.
“The bill’s definition of social media platform is overly broad and ambiguous,” Amy Bos, State and Federal Director for NetChoice, another industry group lobbying against the bill, said. “Many digital services incorporate social elements while not functioning primarily as social media. This creates significant uncertainty regarding which businesses would fall under this new tax.”
The bill defines 鈥渟ocial media platforms鈥 as any website, app, or service that allows users to create profiles and interact socially by sharing content. That includes platforms that host videos, photos, text posts, or links. But it excludes platforms that exist primarily for email, direct messaging, online gaming, product reviews, or technical support 鈥 essentially, anything that doesn鈥檛 center around public social interaction.
The long-term plan to address mental health
In 2022, the state legislature directed a behavioral health work group to create a comprehensive, long-term plan to address the mental health needs of Washington鈥檚 youth. That plan, still in progress, is expected to be released in late 2025.
In the meantime, supporters of the bill believe a financial foundation needs to be in place 鈥 and that social media companies, which play a major role in shaping youth culture and mental health outcomes, should share in the cost.
Under current tax law, social media companies report their advertising income under the 鈥渟ervices and other activities鈥 category of the B&O tax system, which already applies a rate of up to 1.75%.
But they are not subject to any additional taxes specifically related to their operations. HB 2038 would change that, at least in Washington.
Nonprofits are exempt from the new tax, as are small businesses that don鈥檛 cross the state鈥檚 B&O filing threshold 鈥 currently $125,000 in annual income. That means the burden will fall on larger, for-profit tech companies with major online footprints.
The bill bypasses the usual sunset clause that applies to most new tax measures. It includes an exemption from the standard 10-year expiration, and it鈥檚 not subject to review by the state鈥檚 Joint Legislative Audit and Review Committee, which often evaluates tax preferences. Lawmakers appear to be sending a message: this tax isn鈥檛 a short-term experiment 鈥 it鈥檚 a long-term investment.
HB 2038 doesn鈥檛 include an appropriation, so lawmakers would need to formally authorize how the money is spent in future budgets. But the framework is in place. And if it passes, the first dollars would start flowing into the new youth mental health account in early 2026.
Matt Markovich is the 成人X站 Newsradio political analyst. Follow him on聽.