Avalara Achieves Dramatic Growth in Revenue, Clients, Activity; Avalara's Automated Sales Tax Management Service (STMS) Provides Online Access to Up-to-Date Sales Tax Calculations, Rates and Verified ZIP+4 Addresses.

BAINBRIDGE ISLAND, Wash. -- Avalara (http://www.avalara.com) -- the market's only small and medium business (SMB)-oriented provider of on-demand, web-based sales tax compliance services, has -- in two years of operation -- achieved a dramatic series of growth metrics.

Rapid growth in terms of revenue, registered users, partners and transactions per second together indicate strong and growing market acceptance of the AvaTax automated sales tax management service (STMS), as well as other Avalara sales tax rate and calculations services, according to Scott McFarlane, Avalara's President and Chief Operating Officer. "We are experiencing a 600% rate of revenue growth for the first half of 2006 -- when compared to the same period in 2005," McFarlane pointed out. "This significant growth is based on a steady, significant and sustained increase in market acceptance of our core AvaTax automated sales tax management service.

As an on-demand web-based service alternative to more expensive and less adaptive software solutions, Avalara has recorded as many as 9.5 transactions per second on high-volume days, and averages nearly 4.0 transactions per second on a more typical business day. "This shows our system's robust architecture and ability to handle all the volume our clients demand of us," McFarlane explained.

In January, 2005, Avalara had roughly 100 registered users and reseller-partners. Today, that figure is nearly 5,000 registered users, for a product line that includes the fully-automated AvaTax sales tax management service, as well as the no-cost AvaRates Now(TM) online rate look-up service and the just-announced TaxRegions Online(TM) service -- developed exclusively for ProStores(TM), an eBay(R) Company that enables small- and medium-sized businesses to establish e-commerce sites quickly and cost-effectively. In addition, Avalara is currently signing up an average of from 500 to 700 new users each month.

Avalara also now has more than 450 registered reseller-partners who take advantage of Avalara's distinctive "infinity rewards" commission program, that keeps paying resellers a 20-percent commission for all sales generated for as long as their clients continue to use Avalara's services.

"Avalara has achieved an enviable position in the marketplace, providing an automated web-based service -- STMS -- not available elsewhere to businesses engaged in cross-jurisdictional commerce," McFarlane said, "and that exclusive marketplace position is fueling our growth.

"In addition, having just been named one of only three Certified Service Providers by the Streamlined Sales Tax (SST) coalition of states," McFarlane added, "and because we are the only one of those three that focuses on that 4.6 million business SMB market, we expect our growth to sustain through 2007 and beyond.

About AvaTax(TM)

An SMB market-leading, Web-service-based sales tax solution, AvaTax instantly and accurately calculates sales tax for clients in any of the more than 8,000 taxing jurisdictions in North America; provides detailed, real-time reporting; and automatically generates pre-populated sales tax returns.

AvaTax comes integrated with SMB financial applications serving more businesses than any other solution on the market today, including Microsoft Dynamics(TM) GP, Microsoft Dynamics(TM) NAV, Intuit's QuickBooks(R), Sage Software's Sage MAS 90 ERP, Sage MAS 200 ERP, Sage MAS 500 ERP, Sage Accpac ERP and Epicor's iScala. 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).

About Avalara

Headquartered on Bainbridge Island near Seattle, Washington, Avalara is changing the sales tax landscape by delivering innovative and affordable solutions to small and mid-sized businesses. Avalara's mission is to transform the sales tax compliance process by creating cost-effective, state-of-the-art solutions, and does so primarily through integrated, on-demand, Web-based services that provide transparent transactions, accurate tax compliance, painless administration and effortless reporting. Avalara is one of only three sales tax automation providers operating as Certified Service Providers (CSPs) under the multi-state Streamlined Sales Tax program, and is the only one that focuses on small and medium-sized (SMB) businesses.