Avalara rolls out host of new AI features

Tax solutions provider Avalara announced a host of new AI capacities that build on its previously announced updates to its product architecture, automating a number of different tasks while providing generative AI guidance for others, with commands routed through a network of model context protocol servers that open up the platform to interaction with third-party agents. 

For one, the company's AI chatbot Avi, which launched last year, has been made into a browser extension and an Outlook tool. The browser extension, specifically, is made to guide the user through ERP configurations, as well as to detect compliance-related actions in real time (for example, if someone just added a vendor, Avi will ask whether they need an exemption certificate). While the bot technically "lives" in the browser, it can help with ERP implementations by training it on fields required for configuring systems that connect with the Avalara platform, according to Jayme Fishman, Avalara's chief strategy and product officer. 

"In this way it can highlight, guide, and even populate certain values as a guided configuration that is much easier for users," he said. 

Avi will also (with the user's permission) scan inbound invoices, then digitize and validate them for taxes, duties, tariffs, and certificates. Afterwards, it will integrate the results directly into the ERP system, which Avalara said serves to reduce invoice processing costs while catching compliance risks earlier. While currently only for Outlook, Fishman said additional email providers are on the roadmap. 

Beyond the browser plugin and outlook tool, Avalara also rolled out advanced rules with AI visualization that allows users to create, edit and visualize compliance rules through natural language prompts.

The reporting suite, too, has been enhanced with the ability to surface anomalies, highlight trends, and generate custom reports and visualizations. AI will also auto-map standardized invoice fields to country-specific compliance requirements worldwide, allowing for global e-invoicing. The platform also now digitizes and validates certificates with AI with the aim of reducing audit exposure. 

Past this, AI agents, working through the company's updated architecture, can determine harmonized system codes and flag trade restrictions, provide compliance-critical answers with authoritative citations, and offer AI-driven classification of fixed assets and geography assignment.

Finally, Avalara touted its network of MCP servers, which allow AI agents from different platforms to interact with each other. Third-party agents and systems can connect to Avalara's MCP servers to discover and call APIs across Avalara's platform, as the AI agents are embedded into the enterprise workflow itself. This, said Avalara CEO and co-founder Scott MacFarlane, means a shift from isolated features to an interoperable framework. 

"Compliance has shifted from a back-office burden to a mission-critical function," said McFarlane in a statement. "With our agentic solutions, our customers are cutting filing times from days to hours, reducing compliance risk, and freeing teams to focus on growth."