The Council of the European Union officials gave final approvals on the VAT in the Digital Age (ViDA) package, marking a critical step towards modernizing VAT systems across the EU. ViDA will be implemented in stages with different application dates from 2025 to 2035.

The bottom line: Over the next ten years VAT-related processes will become increasingly digital, making non-compliance easier to track and penalize. ViDA has three overarching goals: digitizing all cross-border B2B VAT reporting in the EU by 2030, requiring online platforms to pay VAT for short-term accommodations and passenger transport when providers don't, and expanding the VAT one-stop-shop system to eliminate multiple country registrations (i.e. single VAT registration).

New Jersey is deliberating Senate Bill 3604, a legislation that would eliminate the 200-transaction threshold for economic nexus and leave only a $100,000 revenue threshold for remote sellers. This change is expected to take effect some time in 2025.

The bottom line: This proposal follows a growing state trend of eliminating transaction thresholds while maintaining revenue thresholds. Businesses with high transaction volumes but lower revenue will be most impacted and should monitor this legislation to be prepared.

The sales of genealogical and health history reports are now considered taxable in Rhode Island. The ruling states that when customers view their reports online, this counts as using computer software. It also claims that without this software, companies couldn’t provide customers with their ancestry and health information.

The bottom line: Rhode Island has decided many digital services count as vendor-hosted software for tax purposes, even when they’re mainly for research, analysis, or reporting. Companies offering digital reports, research services, or online subscriptions should review how this ruling affects their taxes.

A new bill in New York would tax companies that collect, process, or sell New Yorkers‘ data. The bill would create a 2% tax on gross receipts from consumer data activities, exempt the first $5 million in gross receipts, and exempt companies less than three years old.

The bottom line: This is the third data tax proposal in New York‘s current session. Similar bills have been introduced twice, but they failed to advance.

Starting July 1, 2025, Estonia‘s standard VAT rate will rise from 22% to 24%. This change will apply until December 31, 2028. For contracts signed before May 1, 2023 that didn't account for VAT changes, the previous 20% rate can only be used until June 30, 2025. The government shortened this transition period to ensure uniform tax application for security funding purposes.

The bottom line: No new transition provisions will be added for the upcoming increase. Estonia expects businesses to manage this risk in their agreements.

Wisconsin‘s Department of Revenue clarified its definition of digital goods in relation to how they are taxed, indicating new product definitions for digital service providers and SaaS companies to consider.

The bottom line: In Wisconsin, digital goods can include prewritten software accessed online (like video games), but not charges for remote software access when a service provider uses that software to process a client's data under their own control.