The following is a question-and-answer session between Brad Buhl, CRO at Broadleaf Commerce, and Nick Borges, Inside Strategic Alliance Manager at Avalara.

In this conversation, Nick offers insight into how Avalara helps enterprise businesses navigate the increasing complexity of global tax compliance. From the downstream effects of tariffs and marketplace facilitator laws to best practices for reducing audit risk and scaling tax operations across jurisdictions, Nick breaks down the evolving tax landscape and how Avalara’s platform delivers value beyond rate calculation.

Q&A

Question: Of course the taxes on everyone's mind right now is tariffs - one thing that hasn't been talked about much is how tariffs are expected to impact sales tax?

Answer: While tariffs themselves are not sales taxes, they can indirectly influence them. When tariffs increase the cost of imported goods, businesses may pass that cost along to customers, which can affect the taxable base. In some jurisdictions, sales tax is calculated on the final sale price—including shipping and handling—so higher product costs can lead to higher tax collection obligations. Moreover, with more businesses reevaluating their supply chains in response to tariffs, they're triggering new nexus implications that can require registration and collection in states they previously didn’t operate in. Avalara helps businesses stay compliant by keeping up with these shifting variables and ensuring tax is calculated accurately in real time.

Question: When I think of the immediate value our clients get from Avalara, real-time rate updates and handling tax complexities are top of mind - what are the other main drivers of value for Avalara clients in 2025?

Answer: In 2025, Avalara's value goes far beyond just rates and returns. Key drivers include:

• Scalability and automation: As clients expand into new markets, Avalara’s automation reduces the manual lift of staying tax compliant across jurisdictions and product lines.
• Global capabilities: With VAT, GST, and customs duty modules, Avalara supports clients in more international jurisdictions than ever, essential in today’s globalized business landscape.
• CertCapture and exemption certificate management: Especially valuable for B2B businesses, managing exemption certificates at scale reduces audit risk.
• Industry-specific solutions: From SaaS to retail to manufacturing, Avalara is increasingly tailored to the unique tax challenges of specific sectors.
• Audit readiness and insights: With dashboards and audit trails, Avalara helps clients identify potential issues before auditors do.

Question: One of the strategies more of our clients have started to dive into is in running their own native Marketplaces - as businesses figure out things like nexus rules and marketplace facilitator laws, how does Avalara help businesses navigate these new challenges?

Answer: Marketplace facilitator laws have added a layer of complexity for both operators and sellers. Avalara supports businesses in a few critical ways:

• Clear liability tracking: Avalara helps distinguish between when the platform is the seller of record versus when third parties are responsible.
• Automated determination: We identify where marketplace facilitator laws apply and adjust tax collection obligations accordingly.
• Centralized compliance: Whether a business is hosting, selling, or doing both, Avalara consolidates the compliance process across all entities.
• Reporting and transparency: Our platform gives marketplaces visibility into what’s being collected and remitted—by whom and where—reducing confusion and liability.
• API integrations: Avalara integrates with most major commerce platforms, making it easier to build native marketplaces without compromising tax accuracy.

Question: As businesses scale with new lines of business, geographies, acquisitions, etc., keeping up with tax regulations become increasingly complex - can you offer any insight into how the tax nerds at Avalara keep up with this layered complexity?

Answer: Avalara’s compliance intelligence is powered by a combination of expert research and automation. Here's how we stay ahead:

• Global tax research team: We have hundreds of tax professionals monitoring legislative changes across 190+ countries and all U.S. jurisdictions.
• AI-driven updates: Our systems detect and update tax code changes rapidly, feeding directly into our calculation engines.
• Content partnerships: We collaborate with governments, tax authorities, and regulatory databases to receive early notice of upcoming changes.
• Continuous platform updates: Our cloud-based system ensures clients benefit from real-time tax rule changes—no manual updates needed.
• Thought leadership: We publish guides, webinars, and insights regularly to help clients anticipate trends and adapt proactively.

Question: For Finance organizations concerned about risk, and specifically any potential audit flags, what guidance or best practices would you recommend?

Answer: Avoiding audit risk starts with a strong compliance foundation. Our recommendations include:

• Centralize tax determination and compliance: Using a unified platform like Avalara reduces errors from decentralized systems.
• Maintain accurate exemption certificate management: Incomplete or expired certificates are a top audit trigger—tools like CertCapture help manage this efficiently.
• Track nexus and registration thresholds: Monitor where your business is growing and when you cross economic nexus thresholds.
• Keep impeccable records: Avalara retains detailed transaction history, reporting, and remittance documentation to support you in an audit.
• Regularly self-audit: Use Avalara’s reporting and analytics to spot anomalies and correct them before they raise red flags.

Ultimately, Avalara helps finance teams sleep better at night by making compliance proactive instead of reactive.

The Bottom Line

The #1 reason enterprises choose Avalara?

They turn tax compliance from a risk and burden into a streamlined, scalable advantage. With real-time accuracy, global coverage, and seamless integrations, Avalara helps businesses stay ahead of tax complexity without slowing growth.

If you need a partner who simplifies compliance, minimizes audit risk, and adapts with your business as it scales, Avalara is the tax automation provider to trust.

Curious to learn more? When it comes to your sales tax obligations, guessing is no way to operate. That’s why Broadleaf has partnered with Avalara to extend the Avalara Sales Tax Risk Assessment, which can help you figure out where you could be on the hook for sales tax.