With many states convening their 2014 legislative sessions this month, the American Institute of CPAs (AICPA) turned to last year’s key policy issues and trends as a barometer to anticipate what this year may hold.
One of the greatest threats to the profession in 2013 was the taxation of professional services. State policy makers seeking to broaden their tax bases opted to explore taxing a variety of services including accounting and consulting services. Currently, Hawaii, New Mexico and South Dakota are the only states that levy a sales tax on professional services in some form. Last year, 15 states considered legislation to tax services. Through the combined efforts of state CPA societies, individual CPAs, CPA firms, and the business community, attempts to levy services taxes failed across the country.
A continuing effort for the profession is the promotion and protection of a uniform system of state licensing laws to allow licensed CPAs to provide services across jurisdictional lines without having to obtain a reciprocal license in states where they are providing temporary services. To date, 49 states and the District of Columbia have passed CPA mobility laws, with the remaining U.S. jurisdictions working towards this goal. State laws are often drafted in a way that may unintentionally harm mobility. Fortunately, not a single bill passed in 2013 that undermined this effort.
The Florida Institute of CPAs scored a major victory in 2013 when Governor Rick Scott (R) signed legislation requiring licensed firms, except those only providing compilations and reviews, to be enrolled in a peer review program as a condition of license renewal. Peer review was also an issue in Texas last year when the Texas Society of CPAs worked to defeat a measure that would have eliminated peer review requirements for CPAs who prepare compilation reports for micro or small businesses. Following the enactment of Florida’s peer review law, stakeholders in Delaware are now pursuing their own peer review law and expect to introduce legislation in February.
An emerging issue with implication for the CPA profession is the decriminalization of marijuana for medicinal and recreational use. In 2012, Colorado and Washington passed ballot initiatives to legalize the recreational use of marijuana. In addition, 20 states and the District of Columbia have legalized medical marijuana. The AICPA, in conjunction with the Colorado Society of CPAs and the Washington Society of CPAs, has developed a White Paper on the issue that describes state-level marijuana laws and how they affect CPAs who are considering providing services for marijuana-related businesses.
More information on last year’s key policy trends can be found in the 2013 Year in Review prepared by the AICPA State Regulatory and Legislative Affairs Team.