CPA Firm Mobility Enacted Across the Country in 2017
CPA Firm Mobility Enacted Across the Country in 2017
The American Institute of CPAs (AICPA) State Regulation and Legislation Team tracked over 350 bills affecting the CPA profession at the state-level in 2017. Among other profession victories, several states adopted full CPA firm mobility and almost every state now has the comprehensive definition of attest.
CPA Firm Mobility
CPA firm mobility allows CPAs and CPA firms to offer attest services such as audits and reviews across state lines without having to get multiple state licenses. Almost half the country now allows for firm mobility, with six states adopting the provision in 2017: Florida, Iowa, Illinois, Missouri, Montana and New Mexico.
CPA firm mobility gives the public more choices in services provided by CPA firms, allowing consumers to find a CPA that can best meet their needs. Given the realities of today’s marketplace in which businesses and consumers operate across state lines, firm mobility will continue to be a key profession issue in 2018.
Comprehensive Definition of Attest
In 2014, when the AICPA and the National Association of State Boards of Accountancy (NASBA) introduced the comprehensive definition of attest in the Uniform Accountancy Act, 15 states allowed for the updated definition. Today, after the combined efforts of the AICPA, state CPA societies and NASBA, 47 U.S. jurisdictions have the comprehensive definition.
In 2017, seven jurisdictions adopted the provision: Arkansas, the District of Columbia, Idaho, Missouri, New Mexico, Utah and Vermont.
Regulatory Reform
States continue to grapple with the U.S. Supreme Court decision North Carolina State Board of Dental Examiners v. FTC. In 2017, 26 states introduced regulatory reform legislation.
Two states, Montana and Mississippi, passed legislation that included active supervision components – placing their state boards of accountancy under an umbrella authority that monitors all board activities.
States can expect to see more regulatory reform legislation in 2018.
Sales Taxes on Professional Services
As states experience revenue challenges to meet their budget priorities, there may be proposals to raise revenue by taxing professional services, including those provided by CPAs and CPA firms. Taxes on professional services cause a rise in compliance costs and lead to higher costs for consumers and small business owners. CPA firms regularly practice across state lines and taxing professional services may create organizational and technical problems for administering such a sales tax.
Thirteen states introduced sales taxes on professional services legislation in 2017. While none of the bills passed, this is a continuing trend states should continue to watch for in 2018.
