Small business platform Xero has introduced its auto sales tax capability to offer small business owners and their advisors with sales tax calculations, comprehensive reporting, and automated filing options.

Built in association with tax compliance automation firm Avalara, the new embedded solution integrates advanced sales tax workflows and management directly into the Xero platform. This allows advisors and business owners to automate sales tax calculations, reporting, and filing.

Avalara global partners senior vice president Meg Higgins said: “Avalara’s expansive tax content database and sales tax calculation engine, coupled with Xero’s invoice and reporting capabilities, make it easy for both small business customers and their advisors — who often file on their customers’ behalf — to get tax right.

“With Avalara embedded in the Xero platform, customers and advisors will benefit from a seamless delivery of tax determinations and calculations on every transaction.”

According to Xero, the new solution is currently most appropriate to individuals who invoice for their services and goods in the company’s platform, operate across multiple jurisdictions, and offer a combination of taxable, non-taxable, and exempt goods.

In the coming months, use cases for auto sales tax will expand beyond invoices, said the small business platform.

The new capability is said to help users to easily set up sales tax in every state where a business is registered to collect sales tax.

It also supports users in automatically calculating appropriate sales tax rates on invoices.

Besides, Xero customers will have the option to sign up for Avalara’s automated e-filing capabilities.

Xero chief product officer Diya Jolly said: “Services and goods-based businesses struggle with sales tax implications while navigating a multitude of channels.

“This is particularly challenging for goods-based businesses who have been underserved in having a reliable sales tax solution, and it is essential to their operations.”