Avalara's Forward-Looking Insights for 2026
Avalara shares its predictions about how automation, regulation, and real-time data will shape tax, trade, and digital operations globally.
Avalara, the leader in tax and compliance solutions, has unveiled its insights for the year 2026, highlighting the expectations of its executive team and experts from various fields including finance, artificial intelligence (AI), global trade, and more. The company forecasts that in 2026, businesses will experience heightened digital precision, innovative compliance strategies, and agile data management.
According to Ross Tennenbaum, President of Avalara, CFOs are shifting from being financial gatekeepers to becoming essential data strategists. He emphasizes that in the evolving landscape of 2026, the integration of financial, tax, and operational data will be key for organizations seeking to enhance their agility.
The Evolution of the CFO Role
With technology advancing, Tennenbaum notes that CFOs will increasingly seek insights beyond merely viewing tax as a cost. They will leverage tax data to forge new growth pathways for their organizations. In 2026, top finance departments will operate more like consulting firms, employing real-time analyses of tax, compliance, and profit margins to inform their daily decision-making.
Furthermore, tax complexity is expected to pose a significant risk for enterprises as governments adopt stricter real-time reporting and establish global tax standards. As a result, CFOs will not only budget for compliance needs but also allocate resources for audit preparation and safeguarding data integrity.
Accountability in AI: The Compliance Cornerstone
Danny Fields, the Chief Technology and Customer Operations Officer at Avalara, foresees AI fundamentally changing how companies handle compliance. The integration of AI into tax and compliance decisions will necessitate a new focus on accountability.
Fields predicts that continuous compliance will replace traditional methods, with governments calling for immediate access to transaction data. This shift means businesses will need to adopt resilience and reliability as vital metrics for compliance.
He emphasizes that the true potential of AI will arise from its orchestration rather than experimentation, as organizations cultivate systems that allow for automated processes coupled with necessary human oversight. A critical focus for companies in 2026 will be the trustworthiness of AI applications.
The Landscape of U.S. Tax Policy
Scott Peterson, VP of Government Relations at Avalara, anticipates minimal changes to the tax structure in 2026 following significant reforms in the previous year. However, he warns that the complexity of compliance is likely to escalate. The permanence of 100% depreciation will significantly influence investment strategies, and as certain provisions from the prior tax package expire, fresh legislative discussions may arise.
States are feeling financial pressure from reduced federal funding for essential services, prompting them to reassess their tax codes. Peterson points out that each jurisdiction will face choices regarding compliance strategies based on whether they align with federal guidelines or diverge from them.
Global Trade and Regulatory Challenges
Craig Reed, General Manager of Cross Border at Avalara, foresees trade conditions in 2026 signaling a shift towards clarity despite ongoing volatility. Companies must remain flexible and adjust their supply chains in response to changing trade partnerships.
Reed emphasizes the importance of understanding four critical elements of global trade—de minimis levels, country of origin, tariff classifications, and declared values. He warns that even minor errors in these areas could lead to costly disruptions.
Carlos Mercuriali, Senior VP overseeing International Business Operations at Avalara, echoes this sentiment, suggesting that adaptability will be key for companies navigating future complexities. He highlights the opportunity for those embracing digital forecasting and compliance measures to remain competitive in an evolving market.
AI and Compliance in Retail
George Trantas, VP of Accelerator Sales at Avalara, discusses the transformative role of AI within the retail sector. He foresees that AI will drive operations in digital commerce, allowing businesses to optimize transaction management while retaining strategic oversight.
AI-driven personalization will redefine customer engagement, and Trantas asserts that mastery of tax intelligence will be pivotal for businesses looking to enhance operational efficiency.
Embracing E-Invoicing as Opportunities Grow
Across multiple regions, the push for digital tax compliance will quicken, with an increasing number of countries implementing e-invoicing by 2030. Alex Baulf, Avalara's VP focused on E-Invoicing, declares that 2026 could represent a crucial juncture where compliance can serve as a vehicle for innovation.
Baulf suggests that companies adopting real-time reporting techniques will see enhanced efficiency, paving the way for more insightful business practices capable of sustaining cross-border commerce.
Hospitality Industry Adjusts to AI Integrations
Nicole Rogers, General Manager of Lodging at Avalara, views 2026 as a turning point for pricing transparency laws and the struggle against inconsistent state regulations. The hospitality sector will have to adapt to new tax frameworks, especially in high-rate states, in response to changing traveler behaviors.
Pam Knudsen, Senior Director of Compliance Services at Avalara, notes the potential for AI to enhance enforcement mechanisms for short-term rental compliance, heralding a new era of smarter and more efficient regulatory oversight.
The future of tax and compliance will be shaped by innovation and responsiveness to emerging challenges. Avalara remains committed to guiding businesses through these changes with a robust AI-driven compliance framework.
Frequently Asked Questions
What are Avalara's predictions for 2026?
Avalara forecasts increased digital precision, compliance intelligence, and data agility for businesses globally.
How will CFOs' roles change by 2026?
CFOs will transition to become data strategists focusing on unified financial and operational insights for agile business operations.
What is the significance of accountability in AI for compliance?
As AI makes more compliance decisions, accountability will become essential in ensuring reliable and trustworthy operations.
What challenges do businesses face regarding U.S. tax policy in 2026?
Businesses will confront rising compliance complexity as states adjust tax codes to align with federal changes while managing their unique fiscal challenges.
How will global trade dynamics shift in 2026?
Increased clarity amid trade volatility will demand that companies adapt their supply chains to navigate a diversified global trade landscape.
