Avalara announced it has acquired HotSpot Tax, provider of tax compliance solutions for the vacation rental and room sharing industry.

That industry, booming to $85 billion with the success of companies like Airbnb, has been targeted by tax agencies, presenting challenges for vacation rental owners in understanding their tax liabilities.

Software platform HotSpot was created to solve this problem by managing all aspects for occupancy-related tax requirements, including obtaining and renewing required licenses, determining and collecting appropriate taxes, preparing and filing tax returns, remitting payments, and tracking tax rate and law changes.

"Second home and room rentals represent a significant and growing segment of the new sharing economy, which presents a variety of tax and compliance complexities for micro businesses and private owners," stated Avalara founder and CEO Scott McFarlane. "HotSpot Tax eliminates these challenges and is therefore a great entry into this market for Avalara. This acquisition aligns with our strategy of extending our reach into new industries, providing more businesses with a single place to turn for all of their transactional tax requirements."

With this latest acquisition, Avalara continues to deepen its tax content and grow its compliance cloud platform.

"With its well-established leadership position in cloud-based tax compliance automation, Avalara is the ideal complement for HotSpot and its customers," stated Rob Stephens, co-founder and general manager of HotSpot. "Their platform will allow us to continue to build innovative solutions for the vacation rental  and related hospitality markets to meet the high demand expected in these growth areas both domestically and internationally."

Avalara will operate HotSpot under the new brand name Avalara MyLodge. 

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