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.

The city of Chicago has raised the amusement tax on streaming services from 9% to 10.25%. The city also raised personal property lease taxes on cloud computing from 9% to 11%. These tax hikes are going into effect as part of the city‘s attempt to manage its $900 million deficit.

The bottom line: These tax changes went into effect on January 1, 2025. Chicago‘s tax increases on streaming services and cloud computing signal continued complexity and heightened scrutiny in digital service taxation as the city tackles its budget deficit.

Illinois’s Department of Revenue released two tax letters (GIL 24-0036 and GIL 24-0044) confirming downloaded computer software–including video games, game add-ons, and virtual currency–count as tangible personal property and are subject to Illinois sales tax.

The bottom line: Illinois considers downloaded computer software, including video games, in-game items, and virtual currency, to be taxable tangible personal property. For example, even if a basic game or purchase is free, taxes apply to any virtual items or upgrades bought within a game.

Louisiana passed a new digital products tax bill that will broadly tax digital products and services. The bill includes a provision clarifying that “digital product“ does not encompass cable TV services, direct-to-home satellite services, video programming services, or satellite digital audio radio services.

The bottom line: SaaS and subscription-based digital goods are taxable in Louisiana starting January 1, 2025.