The future of tax and compliance is here: Avalara redefines compliance with agentic AI

When Avalara began over 20 years ago, we introduced cloud-native tax automation software that forever changed how businesses manage compliance. Now, we’re redefining the category once again with the launch of our next major innovation: Agentic Tax and Compliance™. This isn’t just releasing new and smarter tool sets within our products; it’s transforming the complex and labor-intensive workflows that have burdened business for decades. Avalara agentic AI doesn’t just support tax and compliance tasks; it actually does the work, providing efficiency and productivity on a whole new level. 

Our agentic AI capabilities are powered by ALFA (the Avalara LLM Framework for Agentic Applications), our proprietary framework that leverages enterprise LLMs with data isolation, finely tuned SLMs, Model Context Protocol (MCP) servers, AI agents, and other tools. 

Avalara is embedded directly into the systems businesses use every day, delivering a level of speed, accuracy, and automation not found in traditional SaaS platforms.

Simply put, Avalara Agentic Tax and Compliance embeds AI agents directly into the tools, systems, and workflows where compliance occurs. Our AI agents execute real-time compliance tasks across the environments where your business happens, whether it’s your ERP, ecommerce platform, financial billing system, email clients like Outlook, or even your browser. 

Avalara AI agents work across systems, trigger API calls, validate data, and complete multistep workflows with unparalleled speed, accuracy, and automation. They don’t wait for instructions — they observe context, offer suggestions, and execute tasks. Additionally, Avalara AI agents can also communicate with other third-party agents using the Google Agent to Agents (A2A) protocol, ensuring seamless integration and operation.  

For instance, an agent in an ecommerce system may want to have Avalara file tax returns on behalf of their customers. It can communicate with our lead agent, Avi, who is responsible for delegating work to all the other agents. Avi acts as a central coordinator, making sure tasks are distributed and completed efficiently. 

In addition, Avi can work on solo missions and embed itself where work happens. For example, Avi can deploy to a user’s Outlook email application with our patent-pending solution that turns the inbox into a compliance checkpoint. The solution scans inbound invoices then automatically digitizes, validates, and routes them to connected systems. Avi can also reside in a browser (patent-pending) to help users install their connectors and remain available to answer all their tax questions, observe user actions, advise on compliance suggestions, and even execute necessary tasks. Avi can also live in our partners’ applications, relieving users from having to sign in to the Avalara portal to work on their critical compliance tasks — Avi goes where work happens.

This embedded model reduces manual effort, increases accuracy, and brings compliance into the everyday tools where decisions happen. No more switching tabs, hunting for rules, or second-guessing mandates, the agentic model streamlines your workflow and enhances your decision-making process.

Avalara solutions span a wide range of tax and compliance areas, all of which are powered by our agentic platform. For example, managing tax and compliance can involve a variety of tasks, including, but not limited to, calculating sales tax, filing returns, and handling exemption certificates. Agentic Tax and Compliance automates these tasks across the entire compliance life cycle.

These AI agents take care of the work managed by large tax teams. Some examples include:

• A tax calculation AI agent calculates U.S. sales and use tax in milliseconds.
• An exemption certificate validation AI agent digitizes, validates, and stores certificates.
• A generative AI tax research agent provides authoritative, citation-backed answers from Avalara global tax content.
• An AI agent files sales and use tax returns with any U.S. jurisdiction.
• A notice management AI agent understands a notice and acts on it.
• An AI agent assigns HS (Harmonized System) codes and identifies restricted trade items for cross-border shipments.
• A registration AI agent helps streamline the registration process through automated document review and data handling.
• An AI agent greatly simplifies working with complex UBL documents for e-invoicing.
• A reporting AI agent allows you to create and navigate reports, explore your data, and prepare for audits.

Behind the agents is our comprehensive and continuously updated tax compliance content, which encompasses information for more than 190 countries, ensuring every action is expert-verified.

This foundation includes one of the largest collections of product and tax data, comprising more than 3 billion products, 660 million ASINs (Amazon Standard Identification Number), 900,000 taxability rules, and 82,000 tax rates.

Avalara agentic architecture is powered by a class-leading, enterprise-grade platform: a resilient active-active, multicloud deployment spanning multiple geographies and hyperscalers such as AWS, Azure, GCP, and OCI. It’s horizontally scalable and architected to support every transaction in the world, highly resilient, and performant — averaging 15-millisecond response times due to our distributed design.

While Agentic Tax and Compliance is a major innovation, it builds on what Avalara has delivered from day one.

Trust and accuracy. Every action is auditable, explainable, and backed by continuously updated tax content across more than 190 countries.

Audit-ready compliance. Avalara compliance AI agents leave a defensible digital paper trail businesses and regulators can rely on.

Seamless integration. The solution works natively inside ERPs, marketplaces, POS systems, and e-invoicing platforms.

Global scale. The solution is powered by thousands of data sources and millions of product taxability rules.

Proven ROI. Customers go live in seconds instead of months, cutting manual workloads and costs.

Enterprise, governance, and security. Avalara provides role-based controls, SLAs, and compliance with SOC 2, ISO 27001, and other high security standards.

We’ve entered a new era — one where compliance doesn’t live on the sidelines, doesn’t require users to jump between systems, and doesn’t wait for someone to ask a question. It’s active, embedded, and always on. This is the future of tax. And it’s already here.

Ready to connect? Contact us to learn more about Agentic Tax and Compliance. Are you a partner? Contact us to learn more about agentic AI.