Sec Form 4 Filing - McFarlane Scott M @ AVALARA, INC. - 2020-12-05

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL OMB Number: 3235-0287 Expires: November 30, 2011 Estimated average burden hours per response... 0.5

1. Name and Address of Reporting Person McFarlane Scott M 2. Issuer Name and Ticker or Trading Symbol AVALARA, INC. [ AVLR] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X __ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) See Remarks (Last) (First) (Middle) 255 SOUTH KING ST., SUITE 1800 3. Date of Earliest Transaction (MM/DD/YY) 12/05/2020 (Street) SEATTLE, WA98104 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 12/05/2020 G( 1 ) V 9,375 D $ 0 0 I By MVPROJECTS, LLC Common Stock 12/05/2020 G( 1 ) V 9,375 A $ 0 9,375 I By McFarlane Family Investments, LLC Common Stock 12/07/2020 G( 2 ) V 100,000 D $ 0 587,723 ( 3 ) D Common Stock 12/07/2020 G( 2 ) V 100,000 A $ 0 109,375 I By McFarlane Family Investments, LLC

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Stock Option (right to buy) $ 39.76 12/07/2020 G( 4 ) V 150,000 ( 5 ) 01/28/2029 Common Stock 150,000 $ 0 241,703 ( 6 ) D Stock Option (right to buy) $ 39.76 12/07/2020 G( 4 ) V 150,000 ( 5 ) 01/28/2029 Common Stock 150,000 $ 0 150,000 I By McFarlane Family Investments, LLC

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other McFarlane Scott M 255 SOUTH KING ST. SUITE 1800 SEATTLE, WA98104 X See Remarks Signatures /s/ Miles Treakle, Attorney-in-Fact 12/30/2020 Signature of Reporting Person Date

Explanation of Responses:

( 1 )On December 5, 2020, the Reporting Person contributed his 50% membership interest in MVPROJECTS, LLC ("MVP, LLC") to McFarlane Family Investments, LLC ("MFI, LLC"), of which the Reporting Person was the sole member at the time of transfer and is the sole manager. On December 11, 2020, the Reporting Person transferred approximately 90% of his membership interest in MFI, LLC to a family trust (which percentage may be adjusted pending a final valuation of such membership interest). The Reporting Person disclaims beneficial ownership of the MVP, LLC membership interest held by MFI, LLC, except to the extent of his pecuniary interest therein, if any. ( 2 )On December 7, 2020, the Reporting Person contributed 100,000 shares of Common Stock to MFI, LLC. On December 11, 2020, the Reporting Person transferred approximately 90% of his membership interest in MFI, LLC to a family trust (which percentage may be adjusted pending a final valuation of such membership interest). The Reporting Person disclaims beneficial ownership of the shares of Common Stock held by MFI, LLC, except to the extent of his pecuniary interest therein, if any. ( 3 )Reflects the number of shares of Common Stock directly held by the Reporting Person as of December 30, 2020. ( 4 )On December 7, 2020, the Reporting Person contributed the vested portion of an option covering 150,000 shares of Common Stock to MFI, LLC. On December 11, 2020, the Reporting Person transferred approximately 90% of his membership interest in MFI, LLC to a family trust (which percentage may be adjusted pending a final valuation of such membership interest). The Reporting Person disclaims beneficial ownership of the stock option held by MFI, LLC, except to the extent of his pecuniary interest therein, if any. ( 5 )25% of the total shares subject to the option vested and became exercisable on January 1, 2020, and 1/48th of the total shares subject to the option vest and become exercisable monthly thereafter such that the option is fully vested and exercisable on January 1, 2023. ( 6 )Reflects the remainder of the outstanding portion of the option that was not transferred to MFI, LLC and remains directly held by the Reporting Person.

Remarks: Chairman and Chief Executive Officer

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.