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Avalara Acquires DAVO Technologies Assets to Automate Everyday Sales Tax Compliance for Small Businesses

April 21, 2021 / Anurag Khadkikar

Avalara, a leading supplier of tax compliance automation for companies of all sizes, reported today that it has acquired the operating assets of DAVO Technologies LLC, a firm that assists emerging small businesses in automating their sales tax needs on a daily and ongoing basis. DAVO's technology automatically connects to point of sale (POS) devices to extract the amounts of tax owed, set aside sales tax funds regularly, keep the funds, and then file and pay their sales tax to state and local tax authorities as they are due.DAVO offers an automated sales tax compliance approach to retailers, hotels, and sole proprietors while simultaneously ensuring sufficient funds for tax obligations to prevent unplanned or underfunded expenditures. The deal's financial terms were not disclosed.

DAVO also assists over 4,000 small businesses in the United States, including coffee shops, bike shops, flower shops, bakeries, hotels, and a variety of other forms of local businesses. DAVO extends Avalara's strategy with streamlined sales tax collection processes to alleviate the burden of compliance as small companies concentrate on core operations and customer service. It is integrated within a trusted point of sale systems such as Clover, Square, and others.

Avalara anticipates significant benefits from the purchase of the DAVO products and team in the following areas:

Small business compliance requirements: The DAVO solution combines with POS systems to pull tax funds daily and hold them for future reporting and remittance to state and local tax authorities. Avalara will have the potential to better support DAVO clients through additional product options, such as licensing and registration, exemption certificates, custom data sets, pre-mapped UPCs for taxability, omnichannel calculation, and expanded returns services, depending on the product offerings, business model, and growth opportunities for each client.

Synergies with partners: DAVO and Avalara share a partner-first model; their embedded technologies integrate with partner systems to improve the customer experience. Avalara's strategic expertise and DAVO's deep client relationships will collaborate to resolve sales tax management with the partner's small to mid-market customer base.

Since its inception, Avalara's mission and growth plan have been focused on acquiring advanced technologies, tax content, and expanded segment expertise. Avalara expands its vision of a global cloud compliance platform for companies of all sizes by acquiring assets from DAVO.

About Avalara, Inc.

Avalara assists companies of all sorts in tax compliance. Avalara provides cloud-based compliance solutions for multiple transaction taxes, including sales and usage, VAT, GST, excise, communications, housing, and other indirect tax types, in collaboration with leading ERP, accounting, e-commerce, and other financial management systems providers. Avalara, headquartered in Seattle, has branches in the United States as well as in Brazil, Europe, and India.