The tax problem growing businesses notice too late

Most businesses don’t think much about tax. It sits in the background, handled by finance and operations.

But that framing breaks down quickly.

In a recent conversation with Greg Chapman, EVP and GM at Avalara, one thing became clear:

“Tax isn’t administrative. It’s operational infrastructure.”

Complexity compounds faster than growth

It rarely feels complex at first. A new state. A new region. A new product line. Each change feels manageable.

Under the surface, you’re dealing with thousands of jurisdictions, each with its own rules, rates, and requirements. Expand internationally and the model shifts again. VAT, cross-border requirements, and entirely different reporting structures all come into play.

Then e-Invoicing enters the picture.

In many markets, transactions aren’t just recorded and reported later. They are validated in real time. Systems need to be accurate at the moment of transaction.

That’s the inflection point.

What looked like a back-office function becomes a system-level requirement.

Tax as infrastructure

Greg described Avalara as a subroutine–running behind the scenes of a business.

It connects to ERP, ecommerce platforms, and point of sale systems, operating alongside every transaction without disrupting the customer experience.

That framing matters.

Because once tax is understood as infrastructure, the conversation shifts. It’s no longer about filing returns. It’s about whether your systems can support complexity at scale.

The mid-market gap

Mid market companies face enterprise-level complexity, without enterprise-level resources.

They don’t have the luxury of building custom infrastructure. They need solutions that work within the systems they already rely on.

That’s where Avalara focused early: integrating into existing ecosystems rather than replacing them.  

What it actually takes to manage tax at scale

In practice, it comes down to a few core capabilities:

• Accurate tax calculation across jurisdictions, in real time
• Continuous update to changing rules and rates
• Automated filing and remittance
• Seamless integration with core business systems

None of these are especially difficult on their own.

The challenge is how they work together, especially as transaction volume increases.

AI is tightening the margin for error

AI is accelerating how tax data is processed, on both sides.

For governments, it enables more efficient, data driven audits. Greater visibility into transactions means less room for inconsistency.

For businesses, that same dynamic raises the bar.

The margin for error shrinks. But with the right system in place, AI becomes an advantage helping track regulatory changes, maintain documentation, and reduce manual overhead.

It doesn’t replace human oversight. It makes system design more important.

System decisions are leadership decisions

As infrastructure becomes more complex, decisions compound[BL2.1]. Short term choices (pricing models, integrations, workflows) create long-term constraints.

These aren’t just technical decisions. They're operating decisions.

As a CRO, this shows up in how we define outcomes, measure progress, and decide where to invest (or stop). Those same disciplines apply to building systems that scale.

Closing thought

Tax isn’t usually top of mind when leaders think about growth. But it’s one of the systems that can slow you down first if it’s not built to scale.

As Carmen Leyton, our CEO of Alta Vista Technology, put it:

“Presume positive intent. People are trying their best, and that mindset is critical to building a trusting team.”

Because behind every system, every integration, and every decision are people navigating complexity in real time.

In this AVT Podcast, we also discussed:

• How leaders define and position their business
• How culture evolves as companies scale
• How to manage disagreement effectively

🎙️ Watch the full episode here.