By 2026, global companies will face a year defined by increased digital precision, new tax challenges, and the growing influence of artificial intelligence (AI) in governance and compliance, according to Avalara senior executives. The forecast focuses on fundamental changes in the finance, trade, retail, e-invoicing and hospitality sectors driven by new regulations, technology and increased oversight.
financial strategy
Finance executives are expected to move from their traditional roles to become strategic orchestrators of digital value, increasing their reliance on the integration of financial, tax and operational data. Data-driven scenario modeling, driven by AI and automation, is expected to replace much of the traditional compliance burden, allowing finance teams to act more as analytical consultants.
“CFOs are becoming data strategists. In 2026, the ability of finance departments to integrate financial, tax and operational data will define enterprise agility. Finance professionals who take tax beyond cost and into strategic insights will lead the next wave of intelligent business growth,” said Ross Tenenbaum, president of Avalara.
With increasing government pressure for real-time digital reporting and global minimum tax obligations, tax complexity is expected to become a key risk for businesses. Budgets will increasingly cover audit defense and ensuring data integrity, moving away from compliance data silos and toward leveraging tax intelligence for broader business planning.
Compliant AI
AI adoption will increase in tax and compliance functions, transforming automation from an experimental tool to a core element of governance. Business leaders predict that continuous, real-time compliance will soon replace traditional periodic reporting as regulatory requirements shift toward instant transaction transparency.
“AI will reshape how companies manage compliance. The biggest challenge in 2026 will be managing automation. As AI takes over tax and compliance decisions, accountability will become critical,” said Danny Fields, chief technology officer and head of client affairs at Avalara.
Metrics such as resilience and reliability are moving to the center of compliance, with continuity in times of disruption considered essential to maintaining regulatory trust. Fields expects that the real impact of AI will be determined by its orchestration and integration with human oversight, as well as measurable levels of trust in managed systems.
taxes and regulations
Following significant tax changes in the United States, it is predicted that there will be fewer major tax reforms in the business environment in 2026. However, compliance complexity is expected to increase as states respond differently to federal funding cuts and as audit scrutiny of the digital sector increases.
“The permanent extension of 100% depreciation will impact capital investment strategies, while the expiration of provisions in the 2025 tax package could spark new legislative discussions,” said Scott Peterson, Avalara vice president of government relations.
States like Colorado have already adjusted their tax laws in response to the federal government’s move, and jurisdictions are faced with the decision to adjust or diverge. Digital industries, particularly the software, SaaS, and lodging markets, are expected to face expanded sales tax regimes and increased audit risk.
Changes in world trade
Trade volatility is expected to decrease slightly, but complexity will still increase as global supply chains diversify beyond the United States. Accurate classification and digital traceability of goods is now critical to minimizing costs and maximizing competitiveness.
“2026 won’t bring calm, but it will bring clarity. The winners will be those who can anticipate change and adjust their supply chains accordingly,” said Craig Reed, general manager of cross-border at Avalara.
Companies are likely to see compliance as a discipline focused on data accuracy, especially since errors in documentation can have significant financial implications.
“Global trade in 2026 will reward companies that can stay ahead of change. The UK is re-emerging as a dynamic trading hub, and companies that orchestrate supply chain agility and compliance precision will turn complexity into opportunity,” said Carlos Mercuriari, senior vice president and head of international business operations at Avalara.
digital commerce
Retailers and marketplaces are expected to experience AI-driven transformation across sales and compliance operations. As automation is expected to grow, so too will the associated risks, making strong governance and auditability a strategic priority.
said George Trantas, vice president of accelerator sales at Avalara.
Customized AI recommendations drive customer engagement, tax intelligence supports growth, and helps ensure transaction accuracy and audit readiness.
The momentum of electronic billing
With more than 60 countries moving towards mandatory e-invoicing by 2030, digital compliance will become more than just a mandate, it will become an operational benefit. Businesses will move from reactive reporting to proactive use of standardized, real-time data across jurisdictions.
“By 2026, e-invoicing will move beyond a government mandate and become a strategic advantage for businesses,” said Alex Baulf, vice president of e-invoicing and live reporting at Avalara.
According to Baurf, the introduction of digital tax obligations will facilitate more efficient and borderless trade.
hospitality trends
In the lodging sector, the focus will shift to managing uneven state regulations and responding to changing consumer habits as remote work trends shift. Increased enforcement powered by AI will help governments quickly identify non-compliant short-term rentals.
“Operators must navigate a patchwork of changes in lodging taxes and special district taxes, particularly in California, Hawaii, Illinois, Connecticut and Colorado,” said Nicole Rogers, General Manager of Lodging at Avalara.
“Jurisdictional authorities are using AI-powered tools to identify noncompliant STRs in real time, and enforcement is faster, smarter, and more consistent than ever before,” said Pam Knudsen, senior director of compliance services at Avalara.
