Avalara Launches Agentic Tax and Compliance™: AI Agents That Work for You

With unmatched tax expertise and technology innovation, Avalara is redefining compliance with a fleet of intelligent agents that initiate and execute tasks

DURHAM, N.C., Oct 1, 2025 /PRNewswire/ -- Avalara, Inc. today unveiled Agentic Tax and Compliance™, a new class of AI agents that initiate and execute compliance workflows from start to finish. Launching October 2025, these intelligent agents deliver accuracy, scale, and speed across the entire compliance lifecycle.

Building on its leadership in tax compliance, Avalara is launching the first platform for Agentic Tax and Compliance™. Powered by the ALFA framework (Avalara LLM framework for agentic applications), Avalara's platform combines trusted content, specialized language models, agentic middleware, and scalable infrastructure to deliver real-time compliance execution.

"The most trusted AI breakthroughs are purpose-built," said Scott McFarlane, CEO and Co-Founder of Avalara. "Just as Harvey AI transformed legal workflows and PathAI redefined diagnostics, Avalara is now setting the standard as the domain-specialized leader in agentic tax and compliance."

Where others build copilots, Avalara builds AI agents
Avalara's AI agents go beyond assisting to doing the work: observing, advising, and executing while embedded directly into the environments where work happens. From ERP to ecommerce systems, Avalara's agents are doing the work that once required entire departments of professionals.

By combining AI agents, Model Context Protocol (MCP) servers, private LLMs, and proprietary domain-specific small language models (SLMs), all encompassed in the proprietary ALFA framework, Avalara is redefining what it means to automate tax and regulatory processes.

Agentic Compliance: A New Operating Model
Avalara pioneered the concept of agentic compliance, the idea that compliance should not be bolted on but built in, powered by intelligent AI agents that repeatedly:

• Integrate with business systems
• Observe data, workflows, and user behavior
• Advise on actions, risk exposure, and compliance obligations
• Execute calculations, filings, validations, and document classification

This shift transforms compliance from a manual burden into a more seamless, scalable, and intelligent process that is always on, reliably repeatable, and executed by AI agents.

Agentic Returns in Action
For example, a Returns AI agent can ingest transaction data, invoke Avalara's headless Returns APIs, apply the appropriate forms and jurisdictional logic, and, upon approval, file on behalf of the client. The result is a digital compliance professional who works 24/7 and stays current with the latest rules and jurisdictions, while delivering scalability, performance, and peace of mind.

From Cloud Disruption to Agentic Scale
Avalara was born in the cloud and brought the first true SaaS model to tax automation, an industry previously defined by on-premises software and manual processes. This transformation was made possible by the rise of broadband internet, which unlocked the reach, scale, and speed required to deliver real-time compliance services.

Now Avalara is executing its next major disruption: agentic tax and compliance. This shift is only possible because Avalara is a technology company that understands tax, not the other way around. The company builds platforms instead of one-off tools. With the same clarity of vision that guided Avalara's first disruption, the company is once again leading the market toward a new operating model.

Avalara's agentic architecture is powered by an even stronger foundation: a resilient active-active, multi-cloud deployment spanning multiple geographies and hyperscalers such as AWS, Azure, GCP, and OCI. It is 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.

The company's history of ubiquity, evident in 1,400+ signed partner integrations and seamless integrations with virtually every ERP, ecommerce system, POS system, and back-office platform, now extends into the agentic world. Wherever a company's agents live, Avalara's AI agents can meet them. In applications, inboxes, folders, workflows, or data streams, Avalara's compliance layer travels to where work happens.

"Compliance has always been complex and resource intensive, and Avalara has worked for years to make it easier for businesses of all sizes," said Jayme Fishman, EVP, Chief Strategy and Product Officer at Avalara. "Now, we're delivering the first-ever digital compliance professionals, AI agents that advise and execute at global scale, making it even easier to handle the most onerous and time-consuming tasks—so businesses can move faster and focus on growth."

Have Your Agent Call Our Agent™
Agentic compliance becomes truly powerful when agents from different systems can interact. Avalara's AI agents are designed to seamlessly collaborate with other agents within an enterprise, whether they originate from an ERP, POS, or ecommerce system to complete tax and compliance tasks with speed and precision. This agent-to-agent interoperability turns Avalara into a force multiplier across an enterprise's agentic flows.

Avalara's AI agents are designed to be portable and operate where work happens. Productivity tools, development environments, file storage systems, and even user devices can connect directly to Avalara's agents to validate taxes, classify products, initiate registrations, or file jurisdictional forms. In an agentic world, Avalara does not wait for data. It meets it at the source, acts on it, and ensures greater compliance at the moment of need. It is the foundation of Avalara's new operating model: Have your agent call our agent.

Whether it is preparing VAT returns in Europe, handling marketplace facilitator rules in the U.S., remitting excise tax in Brazil, or validating licenses in Canada, Avalara provides the only truly agentic infrastructure that spans the full compliance spectrum.

Small Language Models Supercharged by Best-in-Class Compliance Content
Avalara has leveraged its best-in-class content repository to train its own small language models (SLMs), using the most robust and trusted compliance content in the world. These SLMs are designed to complement private LLMs by embedding deep domain knowledge into scalable, intelligent execution. The company's models never ingest or learn from untrusted content, helping to ensure outputs are compliant and accurate to drive agentic compliance.

Why Avalara's Agentic Stack Is Built Differently
Avalara's ALFA powers all of Avalara's AI features by combining:

• Enterprise LLMs with data isolation from Amazon, Anthropic, Google, Meta, Microsoft, and OpenAI
• Proprietary SLMs tuned on billions of compliance data points
• Prompt libraries, guardrails, reasoning, actions, RAG databases, third-party agentic frameworks, APIs, SDKs
• An extensible agentic architecture

Developers can access Avalara's MCP servers today at https://developer.avalara.com/.

A More Intuitive Experience Across the Portfolio
Avalara has always been the most intuitive platform in tax compliance, and agentic automation makes it even simpler. Instead of logging in or navigating screens, customers can just ask an AI agent to do the work. There is nothing new to learn, just natural, seamless execution. From returns to tax calculations to certificate validations, agents make even the hardest tasks virtually effortless.

Avalara has applied agentic AI to the broadest set of tax and compliance solutions in the industry, including Avalara AvaTax, Avalara AvaTax for Accounts Payable, Avalara Returns, VAT Returns & Reporting, Avalara E-Invoicing and Live Reporting, Avalara Exemption Certificate Management, Avalara Business Licenses, Avalara Tax Research, Item Classification, Avalara Cross-Border, Tariff Code Classification, Avalara 1099 & W9, and Avalara Property Tax. As each product is reimagined through the agentic lens, customers can expect more automation, less friction, and a consistent experience powered by Avalara's growing library of intelligent AI agents.

Built for Where Compliance Is Headed
Avalara is going beyond keeping up with mandates, the company is shaping what comes next. With open networks, sandbox testing environments, low-code partner integration, and the ability to run active-active across all major clouds, Avalara is positioned as the only AI compliance layer that is:

• Embedded and interoperable across thousands of systems
• Always on, always compliant
• Designed for developers, operators, and executives alike

The company is unifying deep domain content, agentic infrastructure, and execution-ready models to scale intelligent automation across every category of compliance.

To learn more about Avalara's AI breakthroughs, visit Avalara.com/AI.

About Avalara
Avalara is the agentic tax and compliance leader. For more than two decades, Avalara has developed one of the most expansive libraries of tax content and integrations in the industry, supporting over 43,000 businesses and government entities across more than 75 countries. The company's purpose-built AI agents automate end-to-end compliance processes with greater precision, from tax calculations and return filings to exemption certificate management and beyond. For more information, visit Avalara.com.

Logo - https://mma.prnewswire.com/media/2148367/Avalara_Logo_Tag_RGB_Logo.jpg