Avalara unveils new AI tools to streamline global tax compliance

Avalara has announced new advancements in the use of artificial intelligence agents for automating tax compliance within enterprise workflows.

The latest developments see Avalara's AI agent, Avi, expanded into everyday business tools and platforms, together with the introduction of Model Context Protocol (MCP) servers, AI-powered enterprise features, and integrations designed for global compliance requirements.

Avi Everywhere

Avi, the company's AI agent, is now accessible directly within users' workflows. With a browser extension, Avi guides users through tasks such as enterprise resource planning (ERP) configurations and detects compliance actions in real time. The extension can answer queries related to compliance, offering guidance based on Avalara's tax and compliance content library.

Integrations with Outlook enable Avi to scan inbound invoices, digitising and validating them for applicable taxes, duties, tariffs, and certificates. Results are then integrated into ERP systems, aiming to reduce invoice processing costs and highlight compliance risks at earlier stages.

MCP servers and interoperability

Avalara is offering MCP servers which provide third-party software and systems with agentic access to Avalara's APIs. These servers support more seamless discovery and interaction with the Avalara platform, allowing compliance tasks to be embedded directly into customer systems and workflows.

The company describes this as the evolution of compliance from isolated features towards an interoperable framework, where tax and compliance processing occurs wherever business activity takes place.

"Compliance is no longer a back-office burden, but a mission-critical function," said Scott McFarlane, CEO and Co-Founder of Avalara. "With Avalara's agentic solutions, our customers are cutting filing times from days to hours, reducing compliance risk, and freeing teams to focus on growth."

AI-driven compliance automation

According to Avalara, the updated platform now includes several new AI-powered features:

• AI visualisation of compliance rules: Users can create, edit, and visualise compliance rules through natural language prompts, including the ability to write rules, adjust logic, or seek AI-based suggestions. This is intended to enhance the accuracy and speed of compliance operations.
• AI-powered reporting and insights: The reporting suite now uses embedded AI for highlighting anomalies, surfacing trends, and generating tailored reports and visualisations, supporting more proactive compliance management.
• AI-driven global e-invoicing: The company says its AI now auto-maps standard invoice fields to country-specific compliance requirements, with visual mapping tools for customisation designed to shorten time-to-compliance and increase accuracy across global jurisdictions.

The suite has also added tools to automate exemption certificate validation, assign harmonised system codes for cross-border trade, answer tax research questions with citations from Avalara's tax content, and classify property tax details using AI.

User perspectives

Avalara reports positive feedback from customers regarding these new AI features.

"The AI-powered search in Avalara Tax Research has been a game changer, cutting my research time by more than 80 percent," said Dakota Cox, Accounts Payable at Averitt Express, an Avalara customer.

Ecosystem integration

Avalara is supporting broader adoption of its agentic AI suite through initiatives such as registering its Avi agent in registries like Google AgentSpace, making it discoverable to other enterprise AI systems, and registering MCP servers in marketplaces to facilitate inclusion in customer workflows. The company is also engaging with partners and customers through meetings and events for hands-on access to the new capabilities.

The updates are available across Avalara's agentic platform, which the company says supports over 43,000 businesses and government entities in more than 75 countries.