Tax compliance software firm Avalara Inc. is further embedding its automated tax tools directly into the commerce systems used by many businesses, adding a new integration with Fiserv’s Clover.
Broadly, Avalara develops software that helps businesses calculate, file and manage taxes across digital and physical sales channels. Its tools — including new artificial intelligence (AI) agents designed to automate tax workflows — integrate with ecommerce platforms such as Shopify, Salesforce Commerce Cloud and BigCommerce.
In an April 8 announcement, the software provider said it will embed its fully automated sales tax compliance tool within Clover. The latter is a small business point-of-sale (POS) platform operated by payments processor Fiserv. Once the integration launches later this year, Clover merchants will be able to automatically set aside sales tax each day and track their obligations in real time. The system will also file returns and send tax payments to government agencies on a merchant’s behalf.
How the Clover integration with Avalara works
“By embedding our technology directly into Clover, we’re helping businesses more easily manage complex tax requirements so they can focus on other areas of their business,” said Evan Wright, general manager of ATR, AI Content Solutions and DAVO by Avalara, in the announcement.
Avalara framed the tool as a way to simplify sales tax compliance, which can quickly become complicated as small businesses and online merchants sell across a growing patchwork of channels and jurisdictions.
The new Clover capability is designed to streamline the full process, Avalara said.
Under the hood, the integration is powered by DAVO, Avalara’s cloud-based application used by small and mid-sized merchants, particularly restaurants and retail businesses that rely on POS systems. Many of those merchants now operate across both physical and digital sales channels.
Described by the company as “sales tax on autopilot,” DAVO now embeds sales tax automation natively into Clover’s POS system. It includes what Avalara describes as an “automated daily sales tax set-aside.”
The software reads transaction data from the POS system, separates the tax portion from daily sales and holds those funds in a secure account. When taxes are due, the system prepares the return and sends the payment to the correct tax authority.
“By separating tax funds from operating revenue, the solution eliminates the risk of mixing sales tax dollars with working capital and helps protect merchant cash flow,” Avalara said.
Beyond daily calculations, the system can also update tax rates and rules automatically as they change across jurisdictions. Avalara said this helps merchants avoid “costly errors” and ensure accuracy.
Avalara expands agentic AI tools for tax compliance
The new integration comes amid Avalara’s broader push into agentic AI.
While many software providers have focused on AI copilots that assist users through prompts, Avalara has moved toward autonomous agents designed to carry out entire workflows with minimal human oversight.
“Agentic compliance marks a fundamental shift from workflows supported by AI to workflows executed by AI,” said Jayme Fishman, executive vice president and chief strategy and product officer at Avalara, in a statement.
In November, the company advanced that strategy with Avi, an “orchestration” agent that coordinates a growing network of specialized AI agents. Each agent handles a different task, from tax determination and return preparation to business registration.
The system runs on Avalara’s LLM Framework for Agentic Applications, or ALFA, which combines large and small language models to process data in real time. It connects with more than 1,400 business applications, including ecommerce platforms and point-of-sale software.
The architecture allows the agents to interact directly with a merchant’s software stack. For example, an ecommerce platform could automatically trigger a tax calculation or filing by connecting to Avalara’s compliance agents.
By expanding its use of autonomous AI, the company said it aims to “reduce the workload for online sellers coping with new compliance demands, such as digital reporting mandates in Europe and marketplace facilitator laws in the United States.”
Looking ahead, Avalara said it plans to expand its agentic capabilities throughout this year, including more AI-driven features and deeper integrations.
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