Avalara One of Seven Providers Selected For SSTP Certification Process; Web Service Solution Removes Sales Tax Hassle, Assures Compliance with Complex SSTP Tax Requirements.

BAINBRIDGE ISLAND, Wash. -- The steering committee guiding initial implementation of the national Streamlined Sales Tax Project - known as SSTP - has named Avalara, provider of on-demand sales and use tax compliance solutions for small and medium businesses, as one of just seven firms selected to participate in the Certified Service Provider certification process.

"We're proud that the Conforming States Committee of the national Streamlined Sales Tax Project chose Avalara as the only SMB-focused firm to undergo their demanding CSP certification process," according to Rory Rawlings, Avalara's Founder and Chief Tax Automation Officer. "Technology service providers which are certified, at the end of the rigorous nine-month evaluation process, will offer software and services to businesses in SSTP-participating states. These CSP firms will facilitate sales and use tax collection and remittance under the new, simplified SSTP standards," Rawlings explained.

"A critical part of the Streamline process is the certification of software that retailers can use to ease their burden of collecting state and local sales tax," said Scott Peterson, SSTP Steering Committee Co-Chair, in announcing Avalara's selection. "The following companies have been selected to be the first to go through the state certification process: Avalara, EDS - U.S. Government Solutions, Exactor, Paychex, Sales Tax Services, Salis, and Taxware." Of these seven firms, only Avalara serves the SMB market, which - in the US alone - includes more than four million businesses.

In conjunction with the certification process, Avalara will work with an e-commerce and Internet transactions facilitator to develop a fully SSTP-compliant service package. In addition to the functionality Avalara already offers, this new service package will encompass automated remittance.

"With a price point that fits any company's budget, our web service package will be the hands-down choice for SSTP-compliant automation of sales and use tax for small and medium businesses," according to Avalara's Rawlings. "Ours is currently the only on-demand, ERP-integrated sales and use tax calculation, reporting, and filing system on the market. In becoming certified as an SSTP CSP, we are aiming to offer the first SSTP-compliant system to comprehensively - and affordably - address the increasingly complex task of tax administration required of small and medium businesses in the Unites States."

Automated remittance will be added to AvaTax ST's existing line-up of four functional components, which currently includes:

--Customer address validation to determine customer location to ZIP +4, a factor necessary for accurate identification of jurisdiction

--Tax jurisdiction research to associate the customer location with all applicable tax jurisdictions and rates

--Sales and use tax calculation with consideration of each invoice line item, and the unique tax situation of each business

--Secure, complete and comprehensive reporting for tax filing and audit purposes

--Automated returns - which will be available in Q2 - will feature sophisticated selection of required forms, pre-population of tax data for a specific filing period, intelligent calculations within the form and revision/approval tracking. This feature is being developed in cooperation with STF Services Corporation, and will make use of STF's line of SuperForm Products

How Will Avalara's SSTP-Compliant Solution Work?

Avalara's hosted sales tax calculation service, AvaTax ST, will be integrated with a payment gateway to provide tax collection and remittance services to automatically - or, alternately, upon request by the seller - withdraw funds directly from the seller's bank account, then deposit those funds directly into the appropriate taxing jurisdiction's bank account. All transaction information will be logged and tracked within a secure database and made available to AvaTax ST for robust reporting at the state and seller levels.

What is SSTP?

On November 12, 2002 a Streamlined Sales and Use Tax Agreement (SSUTA) was adopted as part of a nationwide public/private-sector project known as the Streamlined Sales Tax Project (SSTP). SSTP is a collaborative effort by state and local governments and the private sector, with the stated goal of simplifying sales and use tax collection and administration. Toward creating uniformity among states, efforts have been centered on clarifying definitions, sales/use tax rates, sourcing rules (location of taxable event), exemption administration and audit procedures.

States participating in SSTP are allowing businesses to shift their administration burden to designated Certified Service Providers, using processes that qualify as Certified Automated Systems (CAS). To facilitate administration, and share the implementation burden, the cost of using a CSP may be funded entirely by the participating states from the tax revenue collected. Finally, as incentive to use a CSP, businesses will be relieved of the risk of any future sales tax audits. It is projected that the first SSTP-certified CSPs will be selected, and will be fully operational, by January 1, 2006.

In order for the SSTP agreement and protocols to be implemented, a minimum of ten states - representing at least 20 percent of the U.S. population - must change existing laws or enact new laws, bringing those states into compliance with SSTP's terms and conditions.

About AvaTax ST

AvaTax ST is an "on demand" web service that instantly and accurately calculates sales tax for clients in any of the more than 8,000 taxing jurisdictions in the U.S. Introduced to the small and mid-sized business market in 2004 and now serving over 160 partners and end users, AvaTax ST is a web-service solution to businesses' sales and use tax calculation needs. It is available already integrated within some of the SMB market's most widely-used accounting systems, including Microsoft's Great Plains, Navision, Small Business Financials, Best Software's ACCPAC Advantage Series(TM), MAS 90(R) and MAS 200(R), and Scala, among others. The AvaTax service can also be easily integrated with any e-commerce, third-party or custom-built solution.

About Avalara

Headquartered on Bainbridge Island near Seattle, Washington, Avalara is changing the sales and use tax landscape by delivering innovative and affordable solutions. Led by a team of industry experts in sales and use tax, security and information technology, Avalara is focused on providing the easiest, most accurate and affordable way for any-sized company to address all statutory sales and use tax requirements. Additional news and information is available at www.avalara.com.