As an important subject of building a new pattern of social governance with multiple co-governance, the hometown-based business association (HBA) is an important force to promote the modernization of the national governance system and governance capacity. Using Chinese A-share listed companies from 2010 to 2022 as a sample, the governance effect of HBAs on corporate tax avoidance is examined. It is found that participating in HBAs can effectively restrain the corporate tax avoidance behavior. The mechanism test results show that HBAs mainly play the function of serving members and the society, and weaken the tax avoidance motivation of member enterprises by alleviating the constraints of external financing and strengthening the awareness of social responsibility. Further research finds that the inhibitory effect of the HBAs on corporate tax avoidance is mainly reflected in the enterprises with strong tax collection, large shareholding proportion of institutional investors and high attention from analysts, which indicates that in terms of inhibiting tax avoidance, participation in the HBAs has a superimposed effect on tax collection, institutional investor supervision and analyst coverage. That is, whether the HBAs can exert the effect of tax governance depends on the effectiveness of government and market mechanism. It enriches the study on the governance effects of HBAs from the perspective of tax evasion, and expands the literature on the influencing factors of corporate tax avoidance from the perspective of social organization. The conclusions of this paper provide empirical reference for promoting the healthy and orderly development of HBAs, facilitating social organizations to participate in social governance practices, and improving the social governance system of co-construction, co-governance and sharing.