Avalara, a provider of Web-based sales tax solutions for the small and midsized business market, and Taxware, a provider of global transaction tax calculation and compliance software, have entered into a strategic partnership.

The new partnership will enable Taxware, which is owned by First Data Corp., to gain a foothold into the SMB market, while also improving Avalara's offerings. Before the agreement, Taxware has been focused on Fortune 100 companies that have demanding transaction tax requirements, while Avalara had worked in the SMB market providing smaller businesses with Web-based sales tax automation.

"The sales and use tax space is really heating up," said Jared Vogt, chairman and chief executive of Avalara. "When we began forming relationships with accounting packages and we're talking to the manufacturers of the products, we kept running into Taxware. Instead of competing, we decided to form a partnership."

Jayme Fishman, senior vice president of sales, marketing and business development for Taxware, said, "We were experiencing requests for functionality in the SMB space, and as we were pursuing vendors, we kept bumping into Avalara. They focus solely on the SMB space and have a solid delivery vehicle."

The agreement will integrate Avalara's offerings with three of Taxware's services, including Taxware's Taxability Matrix, which covers thousands of industry-specific product, service, entity and use-based rules; TaxSolver, a remittance form and report platform; and Taxware's international rate and value-added tax content, which enables calculation of international value-added taxes for more than 150 countries.

Avalara will also co-deploy and become a reseller of Taxware products through the Avalara Infinity Program, a network of value-added resellers.

Taxware also announced that they had entered into a strategic alliance with Group 1 Software, a Pitney Bowes company, to integrate Group 1's tax jurisdiction assignment software, GeoTax, into Taxware's line of sales and use tax compliance products.

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