Tax software provider Avalara Inc. has launched agentic tax and compliance, a suite of artificial intelligence agents designed to automate tax and regulatory processes for businesses, including ecommerce sellers managing complex, multi-district operations.

Avalara supplies tax calculation, filing, and reporting software to ecommerce platforms such as Shopify, BigCommerce, and Salesforce Commerce Cloud. It said the new system can manage compliance tasks from start to finish. The agents can observe transactions, recommend actions and execute filings within enterprise and ecommerce systems.

“Where others build copilots, Avalara builds agents,” said Scott McFarlane, Avalara’s co-founder and CEO. “These agents don’t just assist — they do the work. From ERP to ecommerce systems, they perform tasks that once required entire departments.”

The launch builds on Avalara’s long-standing role in ecommerce tax automation, where sellers must navigate a patchwork of state, national and international regulations. The company’s new agentic framework embeds directly into digital sales environments, offering merchants continuous, automated compliance without manual intervention.

How Avalara is using agentic AI for tax and compliance

Using Avalara’s ALFA framework, short for Avalara LLM Framework for Agentic Applications, the system combines large and small language models to process compliance data in real time. It connects with more than 1,400 business applications, including ecommerce, accounting, and point-of-sale systems.

One of the first use cases is called Agentic Returns. It automatically compiles transaction data, applies the correct forms and tax rules and files returns after internal review. The approach aims to cut time spent on manual reconciliation and reporting, which can strain ecommerce finance and operations teams.

Avalara’s tools already manage sales tax, VAT (value-added tax) and cross-border tariffs for tens of thousands of merchants. By moving to AI agents capable of autonomous execution, the company aims to further reduce the workload for online sellers coping with new compliance demands, such as digital reporting mandates in Europe and marketplace facilitator laws in the United States.

The system also supports direct interaction between different AI agents inside a company’s software stack. For example, an ecommerce platform could trigger a tax filing automatically by connecting with Avalara’s compliance agent.

“We’re delivering digital compliance professionals — AI agents that advise and execute at scale,” said Jayme Fishman, Avalara’s executive vice president and chief strategy and product officer. “That makes it easier for businesses to focus on growth instead of compliance.”

Avalara’s agentic platform runs across Amazon Web Services, Microsoft Azure, Google Cloud and Oracle Cloud, designed for real-time response at global scale. Its small language models are trained on proprietary tax and compliance data, not open internet sources, to reduce errors and maintain regulatory accuracy.

The company supports more than 43,000 businesses and government entities in over 75 countries, offering products that include AvaTax, Returns, Cross-Border, and E-Invoicing. Each is being reworked to incorporate the new agentic automation model.

Avalara said its goal is to make compliance execution as seamless as the transactions it governs, allowing ecommerce platforms to stay current with tax rules while minimizing administrative work.

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