Mat Young, Vice President, State Regulatory and Legislative Affairs, myoung@aicpa.org

Suzanne Jolicoeur, Senior Manager, State Regulatory Outreach, sjolicoeur@aicpa.org Daniel Bond, Communications Manager, State Regulatory and Legislative Affairs, dbond@aicpa.org

James Cox, Manager, State Legislation, jacox@aicpa.org

AICPA Issues Survey of State CPA Societies

50 state societies responded to the survey: Alabama, Alaska, Arizona, Arkansas, California,

Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Guam, Hawaii, Idaho,

Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,

Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New

York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode

Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin,

and Wyoming.

Question

During your state’s 2012 legislative session, did any proposals occur on licensing of tax preparers?

Yes – 5.8%

No – 94.2%

States that reported seeing such proposals were New Jersey, New York and Ohio.

Question

If yes, were CPAs exempted under the legislation?

New Jersey, New York and Ohio reported that CPAs were exempted under the legislation.

Question

Do you anticipate this type of proposal emerging in your state?

Arizona, District of Columbia, New Jersey, New York, Ohio and Rhode Island anticipate seeing this

type of proposal emerging in their state.

Question

If so, is it a proposal that your state society would support?

The states that anticipate seeing this type of proposal emerging in their state indicated that the society

would not support it.

Question

Now that most states have enacted mobility legislation, is your state facing any challenges or concerns in

implementing mobility?

Puerto Rico indicated it is still in the process of implementing mobility. Kentucky and Oklahoma

indicated that firm mobility may be a challenge in the future.

Question

Has your state considered legislation dealing with any of the following which harm your state’s mobility

law?

Military Licensure – 34.4%

Film Production Tax Credits – 43.8%

State Tax Tribunals – 25.0%

Question

Has your state considered legislation to ban or otherwise restrict the use of biometrics? (For example, the

Alaska Society faced unsuccessful legislation earlier this year that would have impeded the use of

biometric information such as fingerprints. This would have potentially compromised the integrity of the

CPA exam in the state since fingerprinting is critical to identifying test takers.)

Alaska and New Hampshire reported such legislation in their states.

Question

Do you anticipate such legislation next year?

Alaska anticipates legislation to ban or otherwise restrict the use of biometrics in 2013.

Question

If legal in your state or jurisdiction, have you seen any attempt to mandate that medical marijuana

dispensaries have an audit performed by a CPA?

Yes – 0%

No – 100%

Question

Do you expect it to appear in next year’s legislative session?

Michigan and Massachusetts expect the issue to appear in their state’s 2013 legislative sessions.

Question

Many states are currently facing budget deficits and have considered several options to address them.

These include the taxing of professional services including CPA services, and cuts or consolidations to

state agencies including state Boards of Accountancy. Have any of these proposals been considered in

your state this year?

Alaska, Arizona, California, Connecticut, Indiana, Maryland, Minnesota, Missouri, Kansas,

Kentucky, New Hampshire, Oklahoma, Pennsylvania, Rhode Island and Utah reported seeing these

proposals in 2012.

Question

Do you anticipate that they may be considered in 2013?

Alaska, Arizona, Arkansas, California, Connecticut, Georgia, Indiana, Kansas, Kentucky,

Maryland, Maine, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey,

North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, and Virginia anticipate seeing

these proposals in 2013.

Question

Some states are considering initiatives to make their state Board of Accountancy a semi-independent

agency. Has your state considered this type of legislation in 2012?

Alabama, Florida, Georgia, Michigan, Oregon and South Carolina considered this type of legislation

in 2012.

Question

Do you anticipate such legislation to appear in 2013?

Alabama, Arkansas, Florida, Georgia, Montana, Oregon, South Carolina, and Texas expect to see

this legislation in 2013.

Question

Were changes to your state's accountancy statute or regulations enacted during the 2012 legislative

session?

California, Connecticut, District of Columbia, Florida, Hawaii, Indiana, Iowa, Kansas, Kentucky,

Maryland, New Jersey, New York, Ohio, Pennsylvania, Puerto Rico and South Carolina enacted

changes to their accountancy statutes or regulations in 2012.

The following state societies indicated changes of note made this year:

Connecticut adopted non-CPA ownership of CPA firms.

Kentucky indicated that firm registration is now required and the CPE grace period was eliminated.

Grace periods for license renewals were also eliminated.

New Jersey noted that licensees with an active license must now obtain a minimum of 20 CPE hours each

year of the triennial reporting period.

New York’s mandatory peer review regulations went into effect in 2012, and the state’s mobility

regulations were updated.

Pennsylvania increased civil penalties for the first CPE violation and adds additional penalties for further

CPE violations.

South Carolina added an ethics CPE requirement.

Question

Do you anticipate proposals in 2013?

The following states anticipate proposals in 2013: Alaska, Arizona, Arkansas, California, Delaware,

Georgia, Illinois, Kansas, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New

Jersey, New York, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington and

Wisconsin.

Question

Is your state’s accounting statute set to expire in 2013 or 2014?

2013 – Tennessee, Alaska

2014 – Rhode Island, Illinois

Question

Are you considering making changes to your accountancy statute to add or modify peer review

provisions?

The following state societies indicated that they are considering making changes to their accountancy

statutes to add or modify peer review provisions: Arizona, Florida, Hawaii, Idaho, Minnesota,

Missouri, Montana, Nebraska, Pennsylvania and Virginia.

Question

Have you had conversations with your board of accountancy on the issues of Facilitated State Board

Access (transparency) and/or creating an oversight body (PROC)?

The following state societies indicated that they had conversations with their boards on these issues:

Alabama, Arizona, California, Colorado, Connecticut, District of Columbia, Guam, Hawaii,

Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota,

Montana, Nevada, New Jersey, New York, North Carolina, Oklahoma, Oregon, Puerto Rico, South

Carolina and Virginia.

Question

Have you been contacted by your board of accountancy about revising your state’s peer review

regulations?

Arizona, Colorado, District of Columbia, Hawaii, Illinois, Montana, Nebraska and Oklahoma have

been contacted by their boards of accountancy about revising their state’s peer review regulations.

Question

Have you had any activity this year, or do you expect any activity in 2012, in the area of unauthorized

practice of law by your state bar association, a state agency, or your state Supreme Court?

Pennsylvania indicated it had such activity.

Question

Has your state, either by legislation or regulation, adopted parts of the new “CPE standards” approved by

NASBA and AICPA in 2011?

California, Colorado, Idaho, Kentucky, Missouri and New Jersey have adopted parts of the new

standards.

Question

During this legislative session, did any proposals occur on licensing of other professions that include

some CPA activities, such as private investigators or debt management?

Alabama, Arizona, Massachusetts, Minnesota, New Hampshire, New York, Pennsylvania, Puerto

Rico, South Carolina, Utah, Virginia considered such proposals in 2012.

New York indicated that debt management legislation was introduced in 2012, and CPAs were not

explicitly exempt. Massachusetts also indicated that a bill pertaining to the licensing of debt management

services was introduced. The Massachusetts Society of CPAs was able to secure an exemption for CPAs,

which will remain in the amended bill when it is considered by the legislature in 2013.

Alabama indicated that a bill concerning the licensing of private investigators was considered in 2012,

and CPAs were exempt in the amended legislation. Virginia also indicated that a similar bill containing

an exemption for CPAs was considered this year.

Question

What were the top three issues you lobbied on in 2012?

State responses:

Alabama

o Independent State Tax Tribunal

o CPA Privity

o SSN exempt from license renewals

Alaska

o Prohibition of biometric data collection for professional exams.

Arizona

o Elimination of audit firm rotation for charter schools.

o Federal income tax conformity.

o Procurement practices.

California

o Mobility

o Variety of Tax issues

o Implementation of 150 hour requirement

Colorado

o All issues related to correcting language in other areas of statute so the wording

conformed with appropriate terminology of the accounting profession.

Connecticut

o Non-CPA ownership of CPA firms.

o Adequate staffing for the State Board of Accountancy

o Adoption of GAAP, fiscal management by State Government

District of Columbia

o Mobility

Florida

o Peer Review

o Study on State Board of Accountancy efficiency

o Privity

Georgia

o State Board of Accountancy - against the "streamling" bill.

o Creation of a Tax Tribunal - inclusion of CPAs with the right to represent clients.

o Tax Reform

Guam

o Budget Issues

Hawaii

o Peer Review

Idaho

o Conformity with IRS code - minor withholding rules

Illinois

o Accounting Act Sunset Legislation

o Illinois Tax Tribunal

o Enhanced Criminal Penalties to Tax Evasion

Indiana

o Professional Standards

o Tax Administration – Change due dates for S Corps and Non Resident partnerships

o Monitored state taxation and sales tax on services

Iowa

o Draft proposed legislation and pursue modification of section 542.20 of the Iowa

Accountancy Law to eliminate the requirement that firm registration be extended to

review engagements.

o Support the present services tax exclusion in the Iowa Tax Code for accounting, auditing,

tax, and management advisory services.

o Monitor efforts to amend Chapter 11 (Auditor of State) of the Iowa Code.

Kansas

o Tax legislation

o Tax bill including sales tax on services - opposed

Kentucky

o A uniform occupational license form for local jurisdictions.

o Condo association audit requirements.

o Leveling uneven Department of Revenue penalties and interest provisions.

Louisiana

o Change to the filing procedure of composite partnership tax returns.

o Unsuccessfully opposed a state board of ethics opinion that CPAs that work on

government audits are considered public employees and are therefore subject to the

state’s ethics law.

Maine

o Creation of an independent state Tax Board of Appeal.

Massachusetts

o Independent Contractor Reform

o CPA Exemption for Debt Management Licensing

o Workplace Bullying

Maryland

o Sales tax on professional services

o Sales tax on digital products

o Combined Reporting

Michigan

o State tax policy changes

o CPA liability reform (Privity)

o CPA license renewal changes

Minnesota

o Tort Reform

o Federal Conformity

o Tax on professional services

Missouri

o Changes to the state’s sales tax

o Income tax changes

o Protecting license funds from sweep legislation

New Hampshire

o Expanding the eligibility of the net operating loss carryover under the business profits

tax.

o Updating the state’s LLC law.

o Expanding the eligibility of the net operating loss.

New Jersey

o Appeal bond caps

o The elimination of a law that requires CPAs who let their license lap for more than 5

years to retake the CPA exam.

o Pushed for nominations to the Board of Accountancy that would diversify the Board with

respect to large firm representation, ethnic and gender diversity.

New York

o Mobility

o Securities regulation

o School district internal audits

North Carolina

o Tax modernization/reform

o Contingent fee audit restrictions

o Combined reporting

Oklahoma

o Consolidation of state agencies

Ohio

o Municipal income tax uniformity

o Various state and local budget reform bills

o Pre-emptively speaking out against sales tax on services.

Oregon

o Tax related proposals

Pennsylvania

o An amendment to the CPA Law that would bring the attest activity requirements in line

with the UAA.

o A Local Tax Enabling Act amendment that would reinstate a bright-line tax

administration rule that had been eviscerated by case law

o Tort Reform

Puerto Rico

o A legislative proposal for financial statement preparation by non CPA accountants, which

was not approved

o Mandatory membership in the Society

o An increase in the requirement to file audited statements.

Rhode Island

o Successfully maintained the state Bureau of Audits.

o Successfully defeated a measure requiring a mandatory three year audit rotation for

municipalities.

o Successfully defeated a measure on sales taxes on accounting services.

South Carolina

o PI requirement exemption

o Tax conformity

Tennessee

o The accountancy board appointment process.

o The accountancy board organizational structure.

Virginia

o Military licensure

o FOIA exemption for financial information in BOA investigation files

o Tax penalty issues

Washington

o Monitoring efforts to propose sales tax on services legislation.

o Opposition to any proposed B&O tax (B&O tax (tax on gross receipts).

Wisconsin

o Promoting GAAP application for state budgeting purposes in a constitutional

amendment.

Wyoming

o Professional licensing requirements for Military and Military Spouses.

Question

What do you expect to be the top three issues in 2013?

State responses:

Alabama

o Independent State Tax Tribunal

o Independence of State Board of Public Accountancy

Alaska

o Prohibition of biometric data collection for professional exams.

Arizona

o Changes to accountancy statutes.

o Clean-up of statutes and rules.

o Federal income tax conformity.

Arkansas

o Sales Taxes on Services

o Changes to Accountancy Law regarding firm names

California

o Tax

o Governmental Audit Issues

Colorado

o State Budget

Connecticut

o Sales Taxes on Professional Services

o Adequate staffing for the State Board of Accountancy

o Adoption of GAAP, fiscal management by State Government

Delaware

o Revising the state’s accountancy statute.

District of Columbia

o Tax Preparer Registration

Florida

o Peer Review

o State Certified Audits by private certified CPAs of Businesses in lieu of Department of

Revenue Audits after an audit notice has been issued.

o Privity

Georgia

o State Board of Accountancy - against the "streamling" bill.

o Creation of a Tax Tribunal - inclusion of CPAs with the right to represent clients.

o Tax Reform

Guam

o Budget Issues

o Mobility

Hawaii

o Mobility

Idaho

o Conformity with IRS code - minor withholding rules

o Peer review update for SAS 70

Illinois

o Accounting Act Sunset Legislation

Indiana

o Sales tax on services

Iowa

o Monitor, and support if appropriate, efforts to grant the Iowa Accountancy Examining

Board a higher level of autonomy in operational and financial matters.

o Support the present services tax exclusion in the Iowa Tax Code for accounting, auditing,

tax, and management advisory services.

o Monitor efforts to amend Chapter 11 (Auditor of State) of the Iowa Code.

Kansas

o Being able to sit for the CPA exam during the last semester.

o Removing the subpoena power of the Board of Accountancy.

Kentucky

o Tax reform proposals

o Leveling uneven Department of Revenue penalties and interest provisions.

o IRS conformity

Louisiana

o State income tax reform.

o Pursuing exemption from the state’s ethics law for CPAs that work on government audits

but are not public employees.

Maine

o Change to the number of specific audit hours under the experience requirement.

Massachusetts

o Workplace Bullying

o Independent Contractor Reform

o Online Sales Tax

Maryland

o Sales tax on professional services

o Combined Reporting

o Tort reform - change from contributory negligence standard to comparative fault

standard.

Michigan

o Additional State tax policy changes

o State board effectiveness

Minnesota

o Tort Reform

o Federal Conformity

o Tax on professional services

o Board of Accountancy funding

o Updates to the accountancy statutes and rules to more accurately reflect current

standards.

Missouri

o Tax credit reform

o Paperless filling and reporting for state returns

o Income tax reduction/elimination offset by increase in sales tax rate and/or base tax.

Montana

o Board Independence

o Changing from two-tier to one-tier licensing

o Fixing an oversight in the state’s 2001 non-CPA ownership legislation.

Nebraska

o "CPA Experience" legislation

o Sales Taxes on Services

o State Budget Issues

Nevada

o Taxation

New Hampshire

o Tax matters relative to supporting the state budget

o State agency rulemaking

o E-filing

New Jersey

o Composition of the State Board.

o Streamlining the licensing reciprocity process and eliminating the need for licensees

across all license professions where there is an exam to retest if their license expires after

5 years.

o Clarifying and/or eliminating the use of the term didactic CPE program in statute and

regulation; and clarifying the educational requirements for candidates to sit for the CPA

exam.

o Facilitated access

o Appeal Bond Cap legislation

New York

o Non-CPA ownership

o School district internal audits

o Securities Regulation

North Carolina

o Tax Modernization

o Unemployment Insurance laws

o Captive insurance entities

Oklahoma

o Consolidation of state agencies

o Sales taxes on services

Ohio

o Municipal income tax uniformity

o Various state and local budget reform bills

o Continuing to speak out against a sales tax on services.

Oregon

o Budget

o Taxation

o Board Semi-Independence

Pennsylvania

o An amendment to the CPA Law that would bring the attest activity requirements in line

with the UAA.

o Business Tax Reform

o Continued Tort Reform

Rhode Island

o Sales taxes on professional services

South Carolina

o Private investigator requirement exemption

o Tax conformity

o Board of Accountancy autonomy

Tennessee

o Accountancy board sunset legislation

Texas

o SDSI renewal for state board.

o Modifications to accountancy act.

o Modifications to franchise tax.

Virginia

o Tax Reform

o Tax Conformity

o Procurement Issues

Washington

o Monitoring efforts to propose sales tax on services legislation.

o Opposition to any proposed B&O tax (B&O tax (tax on gross receipts).

Wisconsin

o Promoting GAAP application for state budgeting purposes in a constitutional

amendment.

Wyoming

o Professional licensing requirements for Military and Military Spouses.