Resources Blog E-commerce

2026 mid-year compliance update: The tax changes every business needs to know for the second half

by Sarah Craig June 26, 2026
Reviewed by Aleksandra Bal , João Pedro Rocha Oliveira , Tim O'Donnell

Most businesses brace for tax changes at the start of the year. But taxing authorities don’t operate on a single annual calendar, and the first half of 2026 made that clear. New jurisdictions appeared in Alabama with fast-approaching filing deadlines. North Carolina issued compliance guidance triggered by the end of the penny. A Colorado streaming tax case is headed to the state Supreme Court. And e-invoicing deadlines are landing across Europe and the Middle East. Our team of tax experts, supporting both TaxJar and Stripe Tax, look at the global tax landscape. Since the beginning of 2026, our team has implemented more than 650 tax changes across 24 states. Here’s what the team has been keeping an eye on recently. 

US sales tax changes: New jurisdictions, round cash transactions, and digital product taxability 

Alabama: New jurisdictions and centralized collection

Alabama made several notable moves on March 1, 2026. The cities of Smiths Station and Monroeville transitioned their local tax collection to the Alabama Department of Revenue (ALDOR), simplifying the remittance process for sellers operating in those markets.

Additionally, Kilpatrick, AL became a brand-new taxing jurisdiction on the same date, carrying a 4% general sales tax rate. First returns were due April 20, 2026. If your business has nexus in Alabama and you weren’t tracking this change, it’s worth reviewing your filing obligations now.

Alabama’s patchwork of state and local tax authorities makes it one of the more demanding states for compliance. Changes like these, a new jurisdiction appearing mid-year with a fast-approaching first return date, are easy to miss without a system actively monitoring them. A tax engine like TaxJar monitors and implements these changes automatically, keeping our customers compliant, without them having to do any manual work or research changes. 

North Carolina: What the end of the penny means for sales tax

When penny production was discontinued in November 2025, North Carolina became one of the first states to address the downstream compliance question. 

On January 22, 2026, the North Carolina Department of Revenue (NCDOR) issued a Sales and Use Tax Directive SD-26-1. Here’s what it means in practice:

• Cash rounding only: Retailers may round cash totals up or down to the nearest five-cent increment. This does not apply to card or digital payments.
• Tax calculation is unchanged: Compute sales tax to three decimal places on the full, unrounded price, then round to the nearest cent for remittance.
• Keep records: Retain receipts showing the pre-tax amount, calculated tax, and rounded cash total, NCDOR may request these in an audit.

Digital product taxability: A case to watch and a trend already underway

This is the case every digital and subscription-based business should be watching. In July 2025, the Colorado Court of Appeals ruled that Netflix streaming subscriptions qualify as “tangible personal property” under Colorado’s sales tax statute, finding that digitally perceptible streaming content falls within the statute’s reach. The ruling reversed a lower court and sent the matter back for further proceedings.

On March 30, 2026, the Colorado Supreme Court agreed to hear the case (No. 25SC629). A Supreme Court affirmance would require streaming providers, and potentially other digital subscription sellers, to collect and remit Colorado state and local sales taxes on subscriptions. Courts and tax agencies in other states are tracking the outcome closely.

Colorado isn’t an outlier, it’s the leading edge. Maine broadened its sales tax to cover digital audiovisual and audio services, including streaming subscriptions, effective January 1, 2026. Dozens of states have updated or clarified digital product taxability rules in recent years, and the pace isn’t slowing. California is the latest state to signal movement in this space, recently passing legislation to begin taxing prewritten software in 2027. California has historically only taxed tangible products, so this is a shift for the state.

The time to model your exposure is before a ruling or new law lands, not after. TaxJar monitors regulatory and legislative developments like these and updates product taxability rules as new obligations take effect, so your tax calculations stay current without manual intervention.

Global update: E-invoicing, digital services VAT, and rate changes

Across Europe, the Middle East, and emerging markets, governments are simultaneously tightening e-invoicing requirements, extending VAT obligations to foreign digital sellers, and adjusting rates on everyday goods. If your business sells internationally, or has plans to, here’s what’s changed in the first half of 2026.

Digital services VAT: More markets, more obligations

The global rollout of VAT and GST rules targeting foreign sellers of digital services kept expanding in 2026. Four new African markets, Mozambique, Togo, Rwanda, and Malawi, activated their regimes in the first half of the year. Two more follow in H2: Sri Lanka’s rules take effect July 1 after a series of delays, and Botswana opens for mandatory VAT collection on October 1 after accepting registrations in June.

The rules share the same policy objective, taxing digital sales at the destination, but the compliance details differ. Botswana and Sri Lanka apply registration thresholds, so smaller foreign sellers may fall outside the obligation. Some regimes extend collection requirements to platforms facilitating digital sales, not just the underlying sellers.

If you’re selling software, subscriptions, or digital content to customers in any of these markets, the obligation to register and collect is either live or imminent. While TaxJar only supports businesses in the US, Stripe Tax supports international tax calculations and keeps coverage current as new regimes activate, so you’re not manually tracking each country’s effective date and threshold rules.

E-invoicing: Hard deadlines across Europe and the Middle East

Several major deadlines have already passed, and more are weeks away:

Belgium	Effective January 1, 2026, mandatory e-invoicing obligations requiring all domestic transactions between Belgian VAT-registered businesses to be exchanged via the Peppol network.
Poland	Poland launched its National e-Invoice System (KSeF) in a phased rollout, with the largest taxpayers (those exceeding PLN 200 million in annual turnover) required to issue structured e-invoices through the centralised government platform in February 1, 2026, with all remaining VAT-registered businesses starting April 1, 2026
France	The first phase of its long-awaited e-invoicing reform begins on September 1, 2026, from which date all businesses must be able to receive structured e-invoices and large and mid-size companies must issue and report them through the ecosystem of accredited partner platforms (Plateformes de Dématérialisation Partenaires), with smaller businesses to follow in 2027.
United Arab Emirates	UAE launched the pilot phase of its e-invoicing programme on 1 July 2026, with mandatory go-live dates for in-scope businesses phased by category and the first fully mandatory wave expected around early 2027.

These aren’t future-planning items anymore, Belgium and Poland are already enforced. France’s September date is ten weeks away. If you have operations in any of these markets and haven’t validated your invoicing infrastructure, that work needs to start now.

To help you remain compliant with e-invoicing obligations, the Stripe App Marketplace provides apps from trusted partners that offer e-invoicing support for a variety of use cases and markets you may require, in addition to apps that support other tax compliance needs.

VAT rate changes: Food reductions taking effect July 1

Several countries are lowering VAT rates on food effective July 1, 2026, a trend worth tracking if you sell food products across borders. Austria is reducing its rate from 10% to 4.9% on essential items including milk, eggs, produce, rice, flour, pasta, bread, and table salt. Ireland is cutting the rate on restaurant and catering services. In Canada, Manitoba is removing its provincial retail sales tax on a range of foods and non-alcoholic beverages.

Rate changes like these require updates to your tax calculation logic by the effective date. Stripe Tax applies rate changes automatically across the jurisdictions it supports, so a July 1 adjustment doesn’t require a manual update to stay correct.

The bigger picture

If you’re managing any of this manually, or relying on a solution that isn’t keeping pace with mid-year changes, now is a good time to evaluate whether your compliance infrastructure is built for 2026’s pace. 

One of the best ways to manage compliance continues to be using tax software, like TaxJar or Stripe Tax. TaxJar is a great fit for businesses that only have tax obligations in the US, while Stripe Tax manages compliance for businesses on a global scale. Consider signing up for a free TaxJar trial or reaching out to the sales team. Our team can help you determine the right tool for your business. 

---