by Jane Egan, MSCPA Executive Director
The 2015 Legislative Session is shaping up to be one that will have a major impact on CPAs, your clients and your businesses. We need to start talking about it now, you and I, so we have the greatest chance at success.
The MSCPA State Taxation and Legislative Committees have compiled a list of bills we are already working on/monitoring and I’ll explain why they are important. MSCPA is proud to be your voice in the legislature but we need your help in three ways:
- Read and respond to the legislative updates we send.
We need your input on proposed legislation and how it will affect you, your company or your clients’ businesses.
- Volunteer to run real life scenarios.
If you think a bill will affect your business or that of a client’s, run the numbers and show us. It’s this type of information that has great impact on our elected officials.
- Support the MSCPA PAC
Our PAC opens the door to legislators. By supporting the MSCPA PAC you can help ensure that your voice is heard and your interests represented at the Legislature. Please make your check payable to MSCPA PAC and mail to 1534 Ninth Ave, Helena, 59601 or charge to your credit card by calling Jean at 800.272.0307.
So let’s start with the first item above: please take a moment to review the bill list compiled below then let me know your thoughts.
As you are well aware, Montana’s tax system is one of the most complicated in the nation. Many legislators are very interested in working to simply our tax system. CPAs, as the tax experts, are an integral part of this process. Legislators rely on you to give them advice and we must be active participants to make sure Montana citizens—your clients and businesses—are represented in the final product.
Senator Bruce Tutvedt (Kalispell) will be re-introducing his bill from the 2013 session, SB 282. SB 282 passed the Senate and House but was vetoed by the Governor.
MSCPA’s Legislative and Governmental Affairs and State Taxation Committee members have been working with Sen. Tutvedt throughout the interim on his proposed bill. Committee members have been – and will continue to – visit chapters to talk about the provisions of the bill and get member feedback that we can share with the Senator.
Two Representatives, Kris Hansen (Havre) and Roy Hollandsworth (Brady) also introduced simplification bills in the 2013 session. We will work with them if they bring bills in the 2015 session.
Penalty and Interest Reform
The Revenue and Transportation Interim Committee has agreed to introduce a committee bill to reform Montana’s penalty and interest statutes to be fairer to taxpayers who comply with the law and to give DOR the ability to penalize the bad actors. The proposal will mirror Federal for the most part and would amend existing provisions and add new penalties for substantial underpayment of tax and for filing a fraudulent or frivolous return.
Exempt CPAs from Private Investigator License
CPAs who perform forensic accounting work in Montana are currently required to have a private investigator license. Current law allows many exemptions including attorneys, legal intern, paralegals, law students, collection agencies and more. This bill, instigated by MSCPA, would include CPAs in the long list of exemptions from the licensing requirement.
Two-Tier to One-Tier Licensing for CPAs
Currently, Montana is one of approximately six states that have a two-tier licensing system for CPAs. The first tier you obtain the necessary education, pass the exam, take the ethics test and receive your certificate. (You cannot practice as a CPA with your certificate only). The second tier you complete the necessary experience requirement and apply for and obtain a license or permit to practice.
The two-tier system if very confusing for the public and for some CPAs. The Montana Board of Public Accountants will be introducing legislation to change to a one-tier system. CPAs will meet all the requirements (education, exam and experience) and apply for and obtain a license or permit to practice.
Enterprise Funding for the Board of Public Accountants
Our Montana Board of Public Accountants, housed in the Department of Labor, is currently funded by appropriation via the Legislature. MSCPA may instigate legislation to change the funding for the Board to enterprise funding. Enterprise funding would give the Board more oversight and greater participation in the funding of the Board activities using the funds they collect from licensing and renewal fees.
In 2008 a US Department of Treasury Advisory Committee on the Auditing Profession reported that “greater independence of state boards of accountancy would enhance their regulatory effectiveness. The Committee recommends that …states evaluate and develop means to make their respective state boards of accountancy more operationally and financially independent of outside influences.” We believe enterprise funding will advance the goal of making boards more financially independent.
Pass Through Entity Reporting
MSCPA members have been meeting with the Department of Revenue for several years to work on pass through entity reporting for non-residents. DOR will propose legislation that will eliminate the consent agreement option which would eliminate the PT-AGR and PT-STM forms. This would leave the pass through with two options: withholding or filing a composite return.
Currently the Montana law regarding the audit threshold is tied to Federal. The Federal threshold will increase from $500,000 to $750,000 for fiscal years beginning on or after 1/1/2015. The Department of Administration and the Montana Association of Counties (MACo) are interested in decoupling the Montana law from the federal requirement and inserting $500,000 as the fixed amount in the Montana code. MSCPA’s Governmental Accounting and Auditing Committee support the change.
Rep. Roy Hollandsworth mentioned during the September Revenue and Transportation Interim Committee that he would be bringing a tax credit bill during the 2015 session. No specifics yet but it might be a bill that puts a sunset on all credits.
In addition to these specific bills, there are 377 bill draft requests listed on the LAWS website. Of those, 10 are probably of interest to us by reading the titles. Once the election has occurred and legislators know they will be serving, the draft requests will increase dramatically.
MSCPA is the accounting profession’s voice in the legislature. We will track the bills we know will affect you, your clients and your companies. We will be monitoring legislation, going to hearings and standing up for the accounting profession and Montana businesses. But nothing is more important than your voice to your local legislators. If legislators don’t hear from business professionals on tax and business issues where will they get their information? Your voice, your expertise and your involvement are crucial.
- Read and respond to the legislative updates.
Published in weekly issues of eConnect, emailed directly to you and/or posted on our website and social media sites. If we ask you to talk to your legislator, please take a moment out of your business schedule and tell them why an issue is important to you.
- Volunteer to run real life scenarios.
Let us know how those numbers stack up for businesses and individuals. Let your legislators know why it matters.
- Support the MSCPA PAC
Your donation gives power to our voice, and MSCPA’s voice is the voice of the accounting profession in Montana. Please remember—donations to PACs must come from individuals; they cannot come from your companies. We rely on your personal contributions.
We’ll be publishing video updates throughout this fall and giving you up-to-the-minute reports once the session begins in January. Technology makes participation easier than ever. You can watch or listen to floor session and committee hearings live over the internet, or watch and listen to archived broadcasts of previous floor sessions and committees. We also urge you to participate in our toll-free conference calls, every Monday at 7:00 a.m. throughout the session.
If you have questions or comments I want to hear from you. Please call 800.272.0307 or email Jane@mscpa.org.