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Avalara's Vision for 2026

Avalara, a leader in tax and compliance solutions, has released its ambitious predictions for 2026, signaling a pivotal shift in how businesses will approach operations on a global scale. With input from their team of executives and industry thought leaders, these insights highlight emerging trends that underscore the increasing integration of artificial intelligence (AI), transparency, and agile compliance strategies.

The Evolution of CFO Roles

One of the key themes identified by Ross Tennenbaum, President of Avalara, is the evolving role of Chief Financial Officers (CFOs) who are transitioning from being mere financial gatekeepers to becoming strategic orchestrators of data. In 2026, CFOs are expected to leverage real-time data analytics to make informed decisions that align operational and financial goals. This approach will redefine the role of finance professionals, who will increasingly see tax not just as a cost, but as strategic intelligence that can drive growth.

This shift means that finance departments will begin to operate more like analytics consultancies instead of traditional financial management offices. Continuous data-driven insights will be critical as businesses tackle an increasing complexity of tax regulations and compliance issues. Tennenbaum noted that the era of tax data existing in isolated silos is ending, as finance teams will harness tax intelligence to enhance their pricing strategies and cash flow management.

AI’s Role in Compliance

Danny Fields, Chief Technology and Customer Operations Officer at Avalara, emphasizes that AI's impact on compliance regulations will be paramount. 2026 will see a move away from periodic compliance filings to continuous oversight, as governments demand immediate visibility into transactions for regulatory purposes. Fields cites that maintaining compliance will require organizations to develop resilient, reliable systems—where continuity and governance will become essential metrics of success.

Additionally, the accountability of AI systems managing these decisions will be a critical area of focus, as organizations navigate the complexities of AI's role in automation and its implications on compliance.

Anticipating Legislative Changes

Scott Peterson, VP of Government Relations at Avalara, notes that while significant federal tax reforms occurred in 2025, businesses should prepare for new complexities in 2026. Although there might be fewer structural overhauls, the compliance landscape will tighten as states adjust regulations to reflect changes in federal funding policies, particularly for services like Medicaid. This adaptability will pose strategic decisions for state jurisdictions on whether to follow federal policies or establish their unique frameworks.

Navigating Global Trade Dynamics

In terms of global trade, Craig Reed, General Manager of Cross Border at Avalara, predicts a slight easing in trade volatility but maintains that agility will remain crucial. Companies that can anticipate changes and adapt their supply chain processes accordingly will thrive. Proper classification in cross-border trades will be imperative—mistakes in data can incur substantial unnecessary costs.

The need for dynamic adjustment is underscored by the global re-emergence of key trade partners and the potential restructuring of the trading landscape to ensure companies can comply effectively without hindrance.

The Future of Retail with AI

As George Trantas, VP of Accelerator Sales at Avalara, elucidates, the influence of AI will penetrate every facet of retail and digital market operations, moving towards a future where AI oversees transactions and humans shape strategy. For retailers, AI-enhanced personalization will revolutionize consumer engagement, ensuring accuracy and efficiency in tax processes will set the best platforms apart in a competitive marketplace.

Trantas notes the duality AI presents; while it minimizes friction in operations, it simultaneously brings forth new compliance risks that companies must navigate. Businesses that prioritize governance and combine swift automation with robust compliance practices will likely emerge victorious in the evolving market landscape.

E-Invoicing as a Game-Changer

Alex Baulf, Avalara's VP of E-Invoicing, expects 2026 to catalyze a significant transformation in compliance mandates, particularly with e-invoicing frameworks. Over 60 countries will have adopted or will adopt these mandates, moving companies from compliance being merely an obligation to a competitive advantage.

Building a strong compliance structure will not just foster responsible business practices; it also promises to enhance transparency and insight, redefining how transactions are processed globally. Companies that embrace real-time reporting solutions will enjoy increased efficiency, leveraging digital tax mandates to improve their operations.

Hospitality’s Compliance Challenges

In the lodging and hospitality sector, Nicole Rogers, General Manager of Lodging at Avalara, identifies 2026 as a crucial year for legislative changes, particularly in pricing transparency laws and varying state regulations. Navigating these changes, alongside expected shifts in traveler demands, will be a significant focus for operators, especially as compliance rules tighten.

As major events like the 2026 FIFA World Cup loom on the horizon, city planners will face challenges in balancing compliance with the evolving needs of both the community and the tourism sector, shaping a future where compliance isn't just a regulatory burden, but an integral part of operational strategy.

Conclusion

In conclusion, Avalara’s 2026 predictions highlight a transformative year on the horizon for businesses across sectors, propelled by AI, compliance agility, and real-time insights. As organizations prepare to embrace these changes, those that align technological advancements with robust governance frameworks will position themselves for sustainable growth and competitive advantage in an increasingly complex global marketplace.