Avalara simplifies Shopify tax compliance with automated marketplace reporting

The Avalara Marketplace Tax Reporting integration imports supported marketplace transactions from Shopify into Avalara, closing a common gap for businesses that sell in multiple channels.

Key takeaways

• If you’re a Shopify merchant that sells in multiple channels, marketplace transactions often create compliance challenges because they don’t flow cleanly into your tax system.
• This can mean additional work for your teams, increase the likelihood of errors, and even put you at risk for fines and penalties in an audit.
• The new Avalara Marketplace Tax Reporting integration was created to solve this challenge by automatically importing supported marketplace transactions into Avalara.

Selling on Shopify is rarely limited to one channel: Many merchants also sell through marketplaces like Amazon, eBay, Walmart, and Etsy.

Marketplace transaction data doesn’t always flow automatically into tax reporting processes, which makes compliance much harder to manage. Data gaps, manual uploads, and duplicate records can create more work for teams, slow down reporting, and increase the risk of errors (along with penalties, in the event of an audit).

The new Avalara Marketplace Tax Reporting integration is designed to solve this significant challenge for sellers.

What’s new: Automated marketplace transaction reporting for Shopify

Avalara Marketplace Tax Reporting is a purpose-built solution that automatically imports supported marketplace transactions from Shopify into Avalara for reporting and returns preparation.

This new integration pulls marketplace transaction data daily from Shopify and prepares it for tax reporting in Avalara—without manual uploads.

And it even works for merchants that aren’t using the Avalara Tax Compliance app for Shopify.

That means sellers who rely on Shopify Tax for calculations can still use Avalara Marketplace Tax Reporting to bring marketplace transaction data into Avalara for reporting and filing.

Why this matters for Shopify merchants

Retailers selling across Shopify and marketplaces face growing complexity. Each channel can introduce different tax rules, reporting requirements, and data structures. When that data is fragmented, it becomes difficult to:

• Maintain consistent tax treatment across channels.
• Prepare accurate returns without manual reconciliation.
• Avoid duplicate or missing transactions.

This is a common challenge in omnichannel retail, where inconsistent systems can lead to errors and increased compliance risk.

Avalara Marketplace Tax Reporting brings that data together so sellers can manage compliance with greater clarity.

What you can do with Avalara Marketplace Tax Reporting

With Avalara Marketplace Tax Reporting, you can:

• Automatically import marketplace transaction data into Avalara.
• Reduce manual data handling and reconciliation work.
• Ensure the right data flows into Avalara Returns for filing.
• Maintain a more complete view of transactions across channels.

Supported marketplaces currently include Amazon, eBay, Walmart, Etsy, Facebook, and Shopify.

How it works

Once connected, Marketplace Tax Reporting performs an initial synchronization of supported marketplace transactions from Shopify. After that, transaction data automatically syncs daily into Avalara for reporting and returns preparation.

That means transaction data is consistently updated and ready for reporting—without additional effort from your team.

Instead of uploading files or managing separate systems, you can rely on a more streamlined flow of data into Avalara.

Reduce friction. Improve compliance.

As your business grows across channels, don’t let tax compliance become a bottleneck—you can clear the path with Avalara Marketplace Tax Reporting. It’s a solution designed to reduce friction for Shopify merchants like you, even if you’re using Shopify Tax and just need a better way to manage marketplace reporting.

By simplifying how transaction data is collected and prepared, Avalara helps you manage multichannel tax compliance with greater accuracy and efficiency.

• Reduce manual effort.
• Decrease the risk of duplicate transactions.
• Support more efficient returns preparation.

Get started

If you use Shopify and sell on marketplaces, Avalara Marketplace Tax Reporting can simplify your tax reporting workflow.

• Learn how to get started with our technical documentation.
• Set up a call with an Avalara for Shopify specialist.

FAQ

What are the compliance risks of multichannel sales?

Different channels can have different tax rules and data structures. Combine that with Shopify platform limitations, and it means your transactions might not flow cleanly into your tax system. That can result in additional work for your teams while increasing the risk of being fined or penalized in an audit.

What does the Avalara Marketplace Tax Reporting integration for Shopify do?

It automatically brings data from your marketplace transactions into Avalara each day, reducing manual effort and streamlining tax reporting workflows.

What marketplaces are supported?

Supported marketplace sources currently include Shopify Marketplace Connect, Amazon, eBay, Walmart, Etsy, Facebook, and Instagram.

Does this solution require the Avalara Tax Compliance app?

No. The Avalara Marketplace Tax Reporting integration also works for sellers who rely on Shopify Tax for calculations.