Xero & Avalara unveil ‘auto sales tax’ to automate tax calculations

By Gloria Mathias

Xero, the global small business platform, has announced the introduction of its auto-sales tax capability, helping to provide reliable sales tax calculations, comprehensive reporting, and automated filing options for small business owners and their advisors.

Developed in partnership with Avalara, a tax compliance automation provider, the embedded solution brings advanced sales tax workflows and management directly into the Xero platform, enabling advisors and business owners to automate sales tax calculations, reporting, and filing.

This new capability is currently suited for those who invoice for their goods and services in Xero, operate across multiple jurisdictions, and have a mix of taxable, non-taxable, and exempt goods.

“With more than 13,000 sales and use tax jurisdictions in the U.S. and constantly changing rules and regulations, businesses are spending valuable time on calculations and reporting and still ending up with errors,” said Meg Higgins, SVP, Global Partners at Avalara. “Avalara’s expansive tax content database and sales tax calculation engine, coupled with Xero’s invoice and reporting capabilities, make it easy for both small business customers and their advisors who often file on their customers’ behalf  to get tax right. With Avalara embedded in the Xero platform, customers and advisors will benefit from a seamless delivery of tax determinations and calculations on every transaction.”

Xero plans to add new features and functionality to the solution over time, including enhancements like adding filing deadlines, expanding past invoicing to other documentation, and adding other revenue sources.

“Services and goods-based businesses struggle with sales tax implications while navigating a multitude of channels. This is particularly challenging for goods-based businesses that have been underserved in having a reliable sales tax solution, and it is essential to their operations. We are thrilled to unlock incremental value for them, giving them time back to focus on growing their business, and increased peace of mind,” said Diya Jolly, Chief Product Officer at Xero.