Property Tax Compliance Tops Six Figures Annually for Most Large Enterprises, Avalara Research Finds

Survey reveals a function under strain, with most large enterprises overspending while lacking adequate property tax compliance protection

DURHAM, N.C., April 28, 2026 /PRNewswire/ -- Avalara, Inc., the agentic AI leader in global tax and compliance, today released new research revealing that property tax compliance has become one of the most resource-intensive and financially consequential functions at large enterprises, yet most organizations lack the infrastructure to manage it effectively.

The report, Paying to Stay Behind: The Hidden Cost of Outdated Property Tax Compliance Strategies, is based on a survey of 1,000 U.S. finance, tax, fixed asset, and IT leaders at large enterprise organizations managing property holdings across more than 50 jurisdictions. The findings show that property tax compliance is consuming significant staffing, time, and budget resources in most enterprises, yet still resulting in fines, interest, and lost savings.

Significant insights from the data include:

• Six in 10 organizations spend between 81 and 160 hours per month on property tax compliance, or the equivalent of two to four full-time workweeks. All respondents reported spending at least 40 hours monthly.
• The all-in annual cost — internal labor, consultants, software, penalties, and interest — tops six figures for 60%¹ of organizations.
  • 22% are spending between $250,000 and $499,999 per year.
  • 91%² spent more than $50,000 in the last 12 months alone.
• 48% of large enterprises dedicate 6–10 full-time employees primarily to property tax compliance. One in four dedicate 11–20, and only 1% manage with just 1–2 people.
• 40% of surveyed organizations are managing property tax obligations across 101–250 jurisdictions, and 12% manage 251–500.

A Resource Drain That Keeps Draining

Despite this level of investment, only 3% of respondents report having avoided financial penalties, interest charges, or missed savings over the past three years. The other 97% have absorbed at least one, and many have absorbed all three: 46% have incurred financial penalties, 52% have paid interest due to compliance challenges, and 44% have missed savings they were entitled to.

The breadth of exposure is a major contributor to what makes property tax so resource-intensive at scale. Most large enterprises surveyed manage obligations across dozens or even hundreds of local taxing authorities, each with its own rules, timelines, and filing requirements.

Confidence Is High. The Data Tells a Different Story.

The report also surfaces a significant gap between stated confidence and actual compliance performance. Nearly all respondents (94%³) say they feel confident that their organization is fully compliant across all jurisdictions. However, the majority of those (57%) say they are only "somewhat confident." Set against the penalty and audit data, the gap is apparent: Nearly nine in 10 (86%⁴) face property tax audits at least annually. 21% face them more than once a year.

Overall, 91%⁵ describe the property tax compliance process as complex and 37% would rate it as very complex. When asked about their top concerns, respondents point first to data management challenges (22%), followed by keeping up with regulatory changes (18%), and limited visibility across jurisdictions (15%).

"Despite the complexity and the manual labor involved, most organizations ultimately get their filings done and therefore consider themselves compliant," said Carl Hoemke, General Manager of Property Tax at Avalara. "But for property tax specifically, there are so many pitfalls in getting everything done on time. Penalties and interest have simply become the norm."

Modernization Is a Near-Universal Priority. Adoption Hasn't Caught Up.

There is broad agreement across the industry that the current approach is not sustainable, but most organizations have yet to take meaningful steps to change it.

• 95%⁶ say modernizing or automating property tax compliance is a priority in the next 12 to 24 months, and 43% call it a high priority.
• Yet only 24%⁷ currently use a dedicated property tax software solution or fully centralized automated system. 76%⁸ are still relying on manual or semi-manual processes, with 27% still managing their compliance with spreadsheets and emails.
• Only 42% describe their property tax compliance process as fully integrated with their ERP systems.

The impacts of these complexities reach well beyond the back office. 94%⁹ of large enterprise finance and tax leaders say property tax compliance complexity is directly impacting strategic business decisions, with 44% reporting significant impact on expansion plans, asset investments, and restructuring decisions.

Hoemke noted, "Property tax is a niche function that requires deep domain expertise, so it has historically resisted automation. But over the past 12 months, that has changed for many enterprises as they realize agentic AI can now handle work that has previously required human intuition and judgment at every step. Modernization is not just about getting returns out the door faster. It frees up your team to focus on the harder question: are you overpaying? That's where the real value is."

Download the full report to explore the complete findings.

Methodology
The research was conducted by Censuswide among a sample of 1,000 U.S.-based decision-makers at upper mid-market and enterprise organizations with operations and property holdings in more than 50 jurisdictions and a workforce of 5,000+ employees. The data was collected between March 23 and April 1, 2026. Censuswide is a member of the Market Research Society (MRS) and the British Polling Council (BPC), and a signatory of the Global Data Quality Pledge.

About Avalara
Avalara is the agentic AI platform for global tax and compliance. For more than two decades, Avalara has built one of the most expansive libraries of tax content and integrations in the industry, processing more than 54 billion transactions annually and supporting millions of businesses worldwide. The company's purpose-built AI agents automate end-to-end compliance with greater precision, from tax calculations and return filings to exemption certificate management and beyond. For more information, visit Avalara.com.

1. Combining answers "$100,000 - $249,999" (38%) and "$250,000 - $499,999" (22%)
2. Combining answers "50,000 - $99,999" (31%), "$100,000 - $249,999" (38%) and "$250,000 - $499,999" (22%)
3. Combining answers "Very confident" (37%) and "Somewhat confident" (57%)
4. Combining answers "Annually" (65%) and "More often than annually" (21%) 
5. Combining answers "Very complex" (37%) and "Somewhat complex" (54%) 
6. Combining answers "High priority" (43%) and "Moderate priority" (52%) 
7. Combining answers "Dedicated property tax software solution" (15%) and "Fully centralized and automated system" (9%) 
8. Combining answers "Primarily manual (spreadsheets / email) (27%) and "Combination of manual and automated tools" (49%)
9. Combining answers "Significant impact" (44%) and "moderate impact" (50%) 

SOURCE Avalara, Inc.