New Avalara insights forecast how automation, regulation, and real-time data will impact tax, trade, and digital operations worldwide
DURHAM, N.C., Nov. 13, 2025 /PRNewswire/ — Avalara, the agentic tax and compliance leader, today released its 2026 trend predictions, offering insights from its executive team and thought leaders across finance, agentic AI, global trade, engineering, government, retail, lodging, and e-invoicing.
From CFO strategy to global supply chains and AI-driven tax enforcement, Avalara executives and business unit leaders agree that 2026 will be a year of greater digital precision, compliance intelligence, and data-driven agility for businesses worldwide.
“CFOs are becoming data strategists,” said Ross Tennenbaum, President of Avalara. “In 2026, the finance function’s ability to unify financial, tax, and operational data will define enterprise agility. Finance professionals who view tax beyond a cost to a strategic insight will lead the next wave of intelligent growth for their businesses.”
Finance and Strategy: The CFO as Data Strategist
According to Tennenbaum, CFOs will evolve from financial gatekeepers to strategic orchestrators of digital value. AI and automation will increasingly manage forecasting, reconciliations, and compliance, freeing CFOs to focus on scenario modeling and growth.
In 2026, leading finance organizations will operate more like analytics consultancies, using real-time tax, margin, and compliance data to guide daily decisions.
Tax complexity will also emerge as one of the most significant enterprise risks as governments accelerate real-time digital reporting and global minimum tax mandates. CFOs will begin budgeting not only for compliance but also for audit defense and data integrity.
“In 2026, we will finally see the end of tax data sitting in compliance silos,” Tennenbaum added. “Finance teams will use tax intelligence to optimize pricing, cash flow, and supply chain strategy.”
AI Accountability Emerges as the Cornerstone of Compliance in 2026
“AI will reshape how businesses manage compliance,” said Danny Fields, Chief Technology and Customer Operations Officer at Avalara.
He added, “The biggest challenge in 2026 is governing automation. As AI takes on more tax and compliance decisions, accountability is critically essential.”
Fields predicts that continuous, real-time compliance will replace periodic filings as governments demand instant visibility into transactions. “Compliance will evolve to be a continuous state beyond quarterly reporting,” he said.
He also expects resilience and reliability to become core compliance metrics. “Continuity during disruption is now part of regulatory trust,” Fields added.
Finally, Fields said the true return on AI will come from orchestration, not experimentation, as organizations integrate governed, auditable systems that blend automation with human oversight. “In 2026, AI trust will be measured,” he said.
U.S. Tax Policy: Stability Meets Scrutiny
Scott Peterson, VP of Government Relations at Avalara, expects fewer structural tax shifts in 2026 following sweeping changes in 2025, but warns that compliance complexity will rise.
“The permanent extension of 100% depreciation will influence capital investment strategies, while expiring provisions in the 2025 tax package could trigger new legislative debates.”
States face fiscal pressure as federal funding for programs such as Medicaid declines. How states respond will determine their compliance burden.
“States like Colorado are already revising their tax codes to offset federal changes,” noted Peterson. “Every jurisdiction will need to decide whether to follow the federal government’s lead or chart its own path.”
Industries under increased audit scrutiny include software, SaaS, and lodging marketplaces, as states expand sales tax regimes into new digital sectors.
Global Trade and Tariffs: Complexity Becomes Opportunity
Craig Reed, General Manager of Cross Border at Avalara, expects trade volatility to ease slightly in 2026 but cautions that supply chains must remain agile as nations diversify trade partnerships beyond the United States.
“2026 will not bring calm, but it will bring clarity,” Reed said. “The winners will be those who can anticipate change and adjust their supply chains accordingly.”
Reed emphasized the four fundamentals of global trade: de minimis levels, country of origin, tariff codes, and declared value. Accurate classification remains critical, as even minor data errors can delay shipments or inflate duty costs.
“In cross-border trade, bad data is more expensive than any tariff,” Reed added. “The future of commerce belongs to companies that treat compliance as a data discipline.”
Carlos Mercuriali, Senior VP and General Manager of International Business Operations at Avalara, shared a similar view:
“Global trade in 2026 will reward companies that can anticipate change. The U.K. is reemerging as a dynamic trade hub, and those that align supply chain agility with compliance precision will turn complexity into opportunity,” Mercuriali said.
He added that industries with multi-country supply chains, including electronics and renewables, will face tightening margins as tariffs rise. Companies that embrace digital traceability and AI forecasting will lead in resilience and competitiveness.
Retail and Marketplaces: AI as the New Compliance Engine
“In digital commerce, AI will reshape every aspect of the retail and marketplace ecosystem,” said George Trantas, VP of Accelerator Sales at Avalara.
“The future of marketplaces will be AI-managed for transactions, with humans leading the strategy,” he added. “The best platforms will combine automation and compliance intelligence to fuel growth.”
Trantas predicts that AI-driven personalization will redefine consumer engagement, while tax intelligence will become a competitive advantage that ensures every transaction is accurate, auditable, and seamless.
“As automation scales, so does compliance risk,” he concluded. “Automation removes friction, not responsibility. The companies that combine speed with strong governance will win.”
E-Invoicing and International Compliance: From Obligation to Advantage
Across regions, digital tax mandates are accelerating, with more than 60 countries implementing or planning e-invoicing frameworks by 2030. Alex Baulf, Avalara’s VP of E-Invoicing and Live Reporting, expects 2026 to mark a tipping point when compliance becomes a catalyst for digital transformation:
“By 2026, e-invoicing will become a strategic business advantage, moving beyond a government mandate,” Baulf emphasized. “As countries such as France, Germany, and Belgium implement their frameworks, global tax reform will increasingly converge around data, pushing multinationals to standardize compliance processes and transition from reactive reporting to proactive control.”
Baulf stressed that companies embracing real-time digital reporting and e-document exchange will uncover new levels of efficiency, transparency, and insight across every transaction. “Digital tax mandates will no longer be just about compliance, but will serve as the backbone of connected commerce, enabling smarter, faster, and more borderless trade,” he said.
Lodging and Hospitality: Transparency, AI, and Local Enforcement
Nicole Rogers, General Manager of Lodging at Avalara, sees 2026 as a pivotal year for pricing transparency legislation and the challenges of non-uniform state regulation. “Operators must navigate a patchwork of changing lodging and special-district taxes, particularly in California, Hawaii, Illinois, Connecticut, and Colorado,” said Rogers.
Traveler behavior will also shift as major employers reduce remote work flexibility, which could lower long-stay demand. Meanwhile, jurisdictions such as Tennessee are tightening compliance rules, requiring upfront tax collection even for long-term stays.
“Even small classification errors can lead to significant compliance costs in high-rate states,” added Rogers.
Pam Knudsen, Senior Director of Compliance Services at Avalara, noted that AI is changing local short-term rental (STR) enforcement.
“Jurisdictions are using AI-powered tools to identify noncompliant STRs in real time,” Knudsen said. “Enforcement is becoming faster, smarter, and more consistent than ever before.”
Knudsen stressed that major global events such as the 2026 FIFA World Cup and the 2028 Los Angeles Olympics will test cities’ ability to balance tax collection with community needs as STR demand surges.
The future of tax and compliance is agentic. In 2026, success will depend on systems that support and drive tax compliance. Avalara’s AI-first infrastructure is built to observe, advise, and act across jurisdictions, platforms, and workflows, delivering the speed, accuracy, and accountability global businesses require. Learn more here.
About Avalara
Avalara is the agentic tax and compliance leader. For more than two decades, Avalara has developed one of the most expansive libraries of tax content and integrations in the industry, supporting over 43,000 businesses and government entities across more than 75 countries. The company’s purpose-built AI agents automate end-to-end compliance processes with greater precision, from tax calculation and filing to e-invoicing and exemption management. For more information, visit www.avalara.com.
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