CPA Mobility Issue Close to Resolution

From the AICPA:

Momentum Continues on CPA Mobility Success as Florida Becomes 39th State to Enact Legislation

An unprecedented wave has moved across the country to enact a uniform mobility provision in every jurisdiction that licenses CPAs. Nearly every state is at some point in the process of considering this concept.

Thirty-nine states have now passed legislation that allows CPAs to gain a practice privilege in another jurisdiction without providing notification, while at the same time agreeing to the automatic jurisdiction of the state. Florida became the most recent state, when the legislature approved a measure on Apr. 29. Other mobility states are: Arkansas, Arizona, Colorado, Connecticut, Delaware, Georgia, Idaho, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Currently, eight other states have mobility legislation pending: Alabama, Hawaii, Massachusetts, Nevada, New Hampshire, North Carolina, Oregon and Vermont, and it is anticipated that by the close of the 2009 legislative sessions the number of mobility states could reach 45. Enacting mobility legislation in these states would mean the profession has moved significantly closer to a national uniform mobility system among all 55 U.S. jurisdictions.

The success of this initiative is due to the ongoing collaborative efforts among the AICPA, the National Association of State Boards of Accountancy, state CPA societies, state boards of accountancy and CPA firms across the country.

Of course, you should notice that one of those states not yet complying is my home state of California, or as we like to phrase it: "The Grand Dutchy of California".

Latest Information on CPA Mobility

Now that the AICPA and NASBA have made this issue a priority, it is no longer necessary for me to keep up with the constant changes for CPA out-of-state licensing (now known as CPA Mobility). For the latest changes go to: AICPA Mobility

New Developments on State Mobility

Accountingweb.com reported that several states are seeking to change state law to allow for individual CPAs licensed in other states with substantially equivalent licensing requirements to provide client services in person, by mail or electronically without securing an additional license or temporary registration. (For the complete story go to: http://www.accountingweb.com/cgi-bin/item.cgi?id=103244&d=815&h=817&f=816&dateformat=%B%20%e,%20%Y)

AICPA/NASBA Joint Committee Proposal on State Mobility

IMPORTANT ANNOUNCEMENT ON STATE MOBILITY

For everyone who has clients outside of their home state, the proposal released on December 11, 2006, by the AICPA/NASBA Joint Committee on Mobility represents an important step in solving the out-of-state licensing issue.

Under the proposal, all notification requirements will be eliminated! State Boards will be given automatic jurisdiction over a CPA and the CPA firm employing them.

I urge everyone who has any interest in the out-of-state licensing issue to read the exposure draft. Comments are due by May 15, 2007. Before you get wrapped up in tax season, please take the time to help yourself and our profession bring this issue to a just conclusion. Go to: http://www.aicpa.org/download/states/UAA_Section_23_Exposure_Draft_2006.pdf

Most of you know I have been working on this issue for over two years now. We need your help now!

Meanwhile all of us who have out-of-state clients will have to navigate the landmines for at least another year. For the most up-to-date information on the current laws in each of the 50 states, you might want to access my excel spreadsheet on the rules for each state. www.artberkowitz.com/Licensing.xls

If you are interested in the history of this issue, continue reading the posts on this blog.

For those who also need CPE, each of my 2007 self-study courses has up-to-date information on the issue of out-of-state licensing. Visit my website at: www.artberkowitz.com and go to the self-study link for courses on accounting, fraud, and ethics.

Great News From Illinois

Just when everything was beginning to look bleakest for CPAs with out of state clients, Illinois came through with emergency legislation that alleviates most of our concerns.

Just a few weeks ago, I had spoken with representatives of the Illinois CPA Society. They told me that they were resigned to the fact that the toughest restrictions in the country were indeed going to go into effect on October 1, 2006 and they were unable to stop it. In fact, some of them had adopted a new "spin" that the rules which would prevent out of state practitioners from preparing even a non resident Illinois tax return without registering in Illinois were actually a good thing for the profession - Huh?

On September 29th the Governor signed emergency legislation that exempts the most onerous parts of the registration requirements.

Here is what it says:

An individual certified public accountant lawfully practicing in another state shall not be required to file for temporary practice or obtain registration as a certified public accountant under this Section so long as the individual CPA is temporarily practicing in this state incidental to practice in another state and does not solicit Illinois clients nor have a physical presence in Illinois.

Interestingly, just like in Georgia, a letter from a California CPA to an official in Illinois seemed to play a large part in overturning the planned restrictions.

I will continue to keep you informed of new developments with regard to out of state licensing as we approach tax season 2007.

Update on Out-of-state Licensing

I continue to get numerous inquiries about the status of out-of-state licensing regulations - most hoping that the issue will just go away. But the facts are still the facts!

NOTHING HAS CHANGED since the beginning of the year!!

If you follow two of the biggest states - California and Illinois - you will have a pretty good idea of where we are in the debate. In the past few days I have spoken with representatives of the boards of accountancy and the state CPA societies for each of these states.

Legislation has been proposed, but nothing has been passed.

California's law went into effect on January 1, 2006. Illinois' law goes into effect on October 1, 2006... and many more states have restrictions on the practice of public accountancy by out-of-state CPAs. See my chart at www.artberkowitz.com

While enforcement has been inconsistent, the fact remains that in many, many states, the practice of public accounting by unlicensed (or unregistered) out-of-state CPAs is a violation of the law.

Many CPAs have chosen the ostrich method of dealing with this issue. We prefer the direct approach - a national public debate on the advantages and disadvantages of restrictions to the interstate practice of accounting by CPAs.

We urge you to contact your congressmen, your state legislators, your state society, your state board of accountancy, NASBA, and the AICPA.

Update to Excel spreadsheet

I have updated the excel spreadsheet (updated to 2/24/2006) showing the rules for out-of-state licensing in all 50 fifty states.

Go to http://www.artberkowitz.com. The link is on the home page.

If you are still seeing the old spreadsheet (dated 12/13/2005), you may need to clear your cache. First try pushing F5 on your computer to refresh the page. If that does not work, there are instructions on how to clear your cache at: http://www.chami.com/tips/internet/021198I.html.