Avalara and Shopify Help Solve Duty and Import Tax for Merchants

Avalara, Inc. (NYSE: AVLR), a leading provider of cloud-based tax compliance automation for businesses of all sizes, today announced the company's cross-border compliance capabilities power the new duty and import tax features of Shopify's global commerce hub, Shopify Markets. Part of Shopify Markets, the new duty and import tax feature natively uses Avalara technology and content to generate landed cost pricing to determine duty and import tax requirements for more than 180 countries. Avalara also announced the expansion of its cross-border capabilities with the acquisition of 3CE Technologies, a company that provides Harmonized System (HS) commodity classification codes and verification solutions to private businesses and government agencies.

Addressing cross-border compliance for Shopify merchants

According to eMarketer, global ecommerce saw significant growth in 2020, growing 27.6% to $4.2 trillion. Global sales are increasing rapidly as more consumers shop online, and more businesses take advantage of the ease of selling products online. Shopify merchants generated $20 billion in cross-border sales in 2020 alone. To take advantage of the cross-border opportunity, businesses need tools that can help identify, create, and manage international markets with minimal barriers. When it comes to cross-border compliance, businesses must ensure customs duties and import taxes are accurately calculated at the time of checkout to reduce compliance risks and negative customer experiences caused by surprise costs at the time of delivery. Shopify, a global commerce platform, has developed an end-to-end cross-border product to help its more than 1.7 million merchants grow their businesses internationally.

With Avalara Cross-Border Estimated, a new, patent-pending feature of Avalara AvaTax Cross-Border, natively available in Shopify Markets, merchants can calculate the appropriate duty and import tax fees at checkout, without requiring tariff codes. Avalara Cross-Border Estimated provides merchants a unique way to meet their cross-border business requirements and the flexibility to make decisions on their duty and import tax determinations. Benefits of the services include:

• Improved accuracy of duty and tax estimates: Calculate costs with confidence by leveraging Avalara's industry-leading artificial intelligence engine and global compliance content database.
• Enhanced checkout experience: Provide customers with landed cost estimates in the cart in real time to reduce unexpected costs at delivery.

"The power and promise of the internet was for businesses to reach customers anywhere, anytime. Ecommerce makes that a reality for buyers and sellers," said Scott McFarlane, CEO and co-founder at Avalara. "However, cross-border commerce comes with increased compliance complexity that can create risk for merchants. Shopify Markets provides merchants with the automated duty and import tax capabilities of Avalara's cross-border solutions to streamline the checkout process and provide estimates to customers in cart, minimizing surprise costs, and reducing compliance risk."

Bolstering HS code classification with the acquisition of 3CE Technologies

Avalara's cross-border solution makes it easier to sell anywhere in the world by automating the process of identifying and mapping tariff codes to products and by calculating customs duties and import taxes. Through the acquisition of 3CE, Avalara expands its current cross-border compliance offerings by further automating its HS code classification services and self-service capabilities for businesses of all sizes, in addition to customers in government and manufacturing.

"Integrating 3CE's HS code classification engine enables Avalara to further enhance our cross-border solution, which will allow us to make it easier to sell anywhere in the world across new industries and use cases," said Craig Reed, general manager of cross-border at Avalara.

"This acquisition brings together best-in-class HS classification technology to automate the onerous process of identifying and mapping codes for cross-border transactions. As part of Avalara's cross-border team, we are committed to removing barriers to global commerce for businesses of all sizes," said Randy Rotchin, president and CEO of 3CE Technologies.

For additional information about Shopify Markets and duty and import tax, please click here. To learn more about Avalara's cross-border offerings, please click here.

Forward-Looking Statements

This press release contains forward-looking statements including, among others, statements about the expected growth opportunities and synergies arising from the acquisition. In some cases you can identify forward-looking statements because they contain words such as "will" or similar expressions and the negatives of those terms.

These forward-looking statements involve risks, uncertainties, and assumptions that could cause actual performance or results to differ materially from those expressed or suggested by the forward-looking statements. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, our actual results could differ materially from the results expressed or implied by these forward-looking statements. These risks and uncertainties include risks associated with: our ability to successfully integrate 3CE Technologies into our business; our ability to sustain our revenue growth rate, to achieve or maintain profitability, and to effectively manage our anticipated growth; and the risks described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent quarterly reports on Form 10-Q, and which should be read in conjunction with our financial results and forward-looking statements. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

About Avalara

Avalara helps businesses of all sizes get tax compliance right. In partnership with leading ERP, accounting, ecommerce, and other financial management system providers, Avalara delivers cloud-based compliance solutions for various transaction taxes, including sales and use, VAT, GST, excise, communications, lodging, and other indirect tax types. Headquartered in Seattle, Avalara has offices across the U.S. and around the world in Brazil, Europe, and India. More information at avalara.com.