On September 11, 2026, NetChoice (plaintiff) filed a complaint against the Illinois Department of Revenue (defendant), seeking declaratory and injunctive relief from the newly adopted statewide Targeted Advertising Services Tax(Targeted Ads Tax) in the Circuit Court of Cook County.
Plaintiff NetChoice is a nonprofit trade association registered in the District of Columbia, whose members are part of the e-commerce industry.
Regulatory Background
On June 16, 2026, the Illinois Governor signed Senate Bill 3019, which enacted(among other provisions) the introduction of the Targeted Advertising Services Tax. The Targeted Advertising Services Tax is scheduled to become effective on January 1, 2027.
Targeted Ads Tax is imposed at the rate of 10% of the gross receipts derived from the targeted advertising services provided in Illinois. Targeted advertising services in this case refer to advertising services provided exclusively online, under specific conditions, and with a precise sourcing threshold.
The targeted advertising tax is not levied on non-online forms of advertising, such as billboards, magazines, newspapers, and any other printed delivery media.
The Targeted Ads Tax is imposed on providers of targeted advertising services. Targeted Advertising Tax is imposed on providers whose annual cumulative gross receipts from targeted advertising services provided in Illinois during the previous 12-month period surpass USD 1 million.
The Targeted Advertising Service providers who are in the scope of the new measure are mandated to register with the Illinois Revenue Authority as such, and will receive a certificate for registration to be able to submit specifically designated returns and to make remittance of the owed tax.
Court Case: NetChoice vs Revenue Department
The plaintiff filed a complaint against the Illinois Revenue Department, requesting to “invalidate” the Amendment to Senate Bill 3019, which introduced the statewide Targeted Advertising Services tax. The Complaint for Declaratory Judgment and Injunctive Relief is founded upon “belief” of NetChoice members that the Targeted Advertising Tax is unconstitutional and unlawful for different reasons.
One of the strongest arguments derives from the conviction that this “tax” in nature is highly similar to Maryland’s Digital Advertising Gross Revenue Tax, which was recently invalidated as defined by the Court as contradictory to federal law.
The principal grounds of the complaint are:
- The Targeted Advertising Tax violates the Federal Internet Tax Freedom Act.
- Second, the tax violates the Commerce Clause of the US Constitution.
- The tax is not fairly apportioned, following the sourcing logic exclusively based on the user-consumer’s Illinois location
- The tax violates the Due Process Clause
- The tax violates the First Amendment of the US Constitution
What’s Next
The next session before the Cook County Court is scheduled for November 17, 2026. NetChoice filed two separate complaints against the State of Illinois, looking to invalidate the Social Media Platform fee, alongside the Targeted Advertising Services Tax.
In the upcoming period, we are going to witness whether the Court is going to align with NetChoice’s standpoint, or whether the adopted regulation will “survive” these challenges, move into the next stage, and produce a binding effect.