Winning in 2026 Retail: The Overlooked Power of Modern Tax Technology

By Pete Olanday, Director, Retail Consulting, Vertex

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Omnichannel won’t be composed of only in-store and online transactions in 2026. Commerce will come from more places than ever, such as through marketplaces, mobile experiences, and increasingly, social and third-party AI platforms. Shoppers will discover, compare, and buy in both familiar and emerging ways that reshape checkout and fulfillment.

As retail experiences become more decentralized, tax complexity intensifies. Tax teams need accurate tax determination and documentation regardless of where or how the transaction begins. Retailers can better prepare to navigate this confidently across new channels and transaction types by modernizing their tax technology. Those that fail to do so risk falling behind, exposing their businesses to compliance issues, margin loss, and customer experience breakdowns.

The Dynamics Retailers Are Already Managing

Retailers are already operating in a tax environment defined by constant change. In the first half of 2025, 408 new or revised sales tax rate changes were issued. This represented a 24 percent increase from the first half of 2024, highlighting the rapidly shifting landscape facing tax teams today.

On top of shifting rates, retailers are handling expanded fulfillment options such as ship-from-store and endless aisles, and pricing variability from dynamic pricing and new promotions. Each of these adds layers of complexity to tax.

As omnichannel expands, tax complexity multiplies—and automation becomes the only viable path to accuracy and compliance.

Meanwhile, shopping patterns are no longer centered on traditional peak seasons like back-to-school and the holidays. In the face of prolonged economic uncertainty, Vertex research shows a rise in off-peak busy seasons and deal-driven purchasing behavior. These shifts require tax calculations to remain accurate and compliant in real-time, even during sudden spikes in transaction volume.

As commerce gets more complex, fragmented tax processes break first, creating compliance risk and slowing business growth.

The Uncharted Next Wave (and the Tax Questions It Creates)

The next wave of retail innovation will make tax even more complicated. New transaction models are emerging faster than the industry can predict, and tax teams will need to support them regardless of where they originate. These models include purchases initiated through social platforms and third-party AI.

Platforms like TikTok Shop have accelerated social commerce, and others are following. Retailers are experimenting with shopping experiences on YouTube Shorts, Discord, and Meta Reels.

Meanwhile, emerging AI-powered purchasing experiences that allow consumers to buy without leaving a third-party platform or site are transforming expectations. When purchasing happens inside third-party environments, the checkout moment becomes harder to define, but tax obligations don’t disappear.

This evolution raises new, high-stakes questions that retailers must be prepared to answer, including:

● Who is the seller of record?

● Where did the transaction legally occur?

● What sourcing rules apply?

● Who owns the tax calculation?

Even if some of these platforms don’t take off, the channel mix will keep changing and retailers will still need tax operations built for speed, scale, and ambiguity.

Tax Operations Are Now a Critical Lever for Retail Growth

Tax used to be a back-office afterthought but now, it’s becoming a frontline growth enabler. As retailers expand into new channels and jurisdictions, tax teams must stay accurate every time. Flexible tax technology helps support new business models without rebuilding systems, staying audit ready and confident in compliance. The retailers best positioned in this environment will evolve from treating tax as a patchwork of disconnected systems, to treating it as part of omnichannel infrastructure.

Omnichannel in 2026 will reward fast innovation, but only if operations can support it. The tax technology stack has an important seat at that table, and modernizing it allows for confident innovation, expansion into new channels and jurisdictions, and meeting customers wherever they shop without adding compliance risk or bottom-line leakage. In the next evolution of omnichannel, tax teams won’t just support growth – they’ll help determine who can sustain it.

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