Avalara Reaches Impressive Software-as-a-Service Milestones - Sales Tax Automation Goes Mainstream

Business Wire, March 12, 2008

1,000 Businesses Using AvaTax[TM], the Leading End-to-End Web-Hosted Sales Tax Solution; More Than 21,000 Customers Utilizing Avalara Services

BAINBRIDGE ISLAND, Wash. -- Avalara (www.avalara.com), the leading provider of Web-service based sales tax automation solutions for small and mid-sized businesses, today announced that it has met the 1,000th mark of businesses using its AvaTax[TM] solution, while more than 21,000 customers utilize the innovative and affordable solutions offered by Avalara. As the leading web-hosted on-demand sales tax solution, AvaTax is offered as a Software-as-a-Service (SaaS) alternative to more expensive and less adaptive software sales tax calculating and management solutions.

"When we founded Avalara, we had a vision of revitalizing the manual and error-prone sales tax industry by delivering a transactional tax solution via the Internet," said Scott McFarlane, founder, president and chief executive officer, Avalara. "We've delivered on that vision through an affordable SaaS solution, and to have 1,000 businesses and more than 20,000 users utilizing AvaTax and its components are significant achievements. While our competitors scramble to switch from traditional enterprise software models, we continue to pioneer the SaaS sales tax movement for calculation, reporting, returns and remittance while exceeding our customers' expectations. As momentum continues to increase for sales tax automation, we expect to double our AvaTax customer base in 2008 and reach the 2,000 business mark."

Through the SaaS AvaTax solution, Avalara provides small- and mid-sized businesses (SMB) clients the outsourced power of a real-time transactional tax solution that employs the current tax rates, sourcing, jurisdictional assignment, taxability rules, and exemption requirements. The innovative SaaS approach offers SMB clients functionality that previously was only available to large enterprises.

"Sales tax automation is inevitable. Sales tax compliance is a statutory requirement that has no benefit to businesses, only risk. Sales tax compliance is perfect for automation and outsourcing, and software-as-a-service is the perfect model to deliver the service to small and medium business around the world," said McFarlane.

"Avalara has been proactive and visionary at building a business to provide tax processing using SaaS techniques," said Randy Johnston, executive vice president of K2 Enterprises, a premier provider of technology continuing professional education (CPE) in the United States and Canada. "They observed a need and have fulfilled it in a way no one else has done."

AvaTax offers the most accurate and affordable global solution for sales, use and VAT tax management services to SMB clients. Through the solution, Avalara processed more than 10.5 million transactions in January 2008 alone. "We filed $714 million in sales tax returns for January filings, with $411 million of that total processed in approximately 7,800 separate filings completed in just two days through our automated remittance service," said Rory Rawlings, founder and chief tax automation officer at Avalara. "That's quite an accomplishment for our business."

Avalara has continued strong and impressive growth since first offering its products in early 2005, when it had approximately 100 users and reseller-partners. Today the company serves more than 21,000 customers across all of its product lines including solutions that manage, automate and simplify sales tax and compliance tasks. In addition to AvaTax, Avalara's comprehensive products include:

* AvaFile[TM] - AvaFile is a fully outsourced managed returns service that allows tax departments to view, modify, and approve returns for submission to tax jurisdictions.

* Trustfile[TM] - Acquired by Avalara in August 2007, Trustfile offers a simple, inexpensive solution that automates sales tax e-filing and e-payment within one application.

* AvaRates[TM] - AvaRates offers the most competitive, easy-to-use, affordable and flexible line-up of sales tax rate tables and tools on the market.

In 2007, Avalara's Trustfile division broke the $10 billion barrier for sales tax filings through its electronic filing service, filing an average of 17,000 returns per month. Additionally, Avalara announced on Monday its intention to acquire Independent Systems and Programming, Inc. (ISPI), a leading provider of software and databases designed to help businesses manage sales and use tax compliance (www.taxrates.com).

To deliver its solutions, Avalara has relationships with more than 1,000 partners/partner organizations and 65 Avalara Alliance partners. Avalara's products integrate with a number of leading ERP, CRM, e-Commerce and point-of-sale applications, including solutions from Epicor, Microsoft Dynamics[TM], ProStores, QuickBooks, NetSuite and Sage.

About AvaTax[TM]:

An SMB market-leading, Web-service-based sales tax solution, AvaTax instantly and accurately calculates sales tax for clients and provides detailed, real-time reporting and effortless returns and remittance. AvaTax comes integrated with SMB financial applications serving more businesses than any other solution on the market today, including Epicor Enterprise, Epicor CRS Retail Suite, Microsoft Dynamics[TM] GP, Microsoft Dynamics[TM] NAV, Microsoft Dynamics[TM] AX, Intuit's QuickBooks, Sage Software's Sage MAS 90 ERP, Sage MAS 200 ERP, Sage MAS 500 ERP, and Sage Accpac ERP. Additionally, with AvaTax On-Demand[TM] developers can integrate Avalara's sales tax Web service with any e-commerce, third party or custom-build solution with use of a comprehensive Software Developer's Kit (SDK).