Changes to HB 550 that Will Affect You & Your Clients

Olsen George 2008

George Olsen, MSCPA Legislative Committee Chair

By George Olsen, Chair, MSCPA Legislative & Governmental Affairs Committee

At our Legislative meeting Monday morning we talked about the progress of the bills we are following in the Legislature.  Holly Franz, our lobbyist, reported on the hearing on House Bill 550—Revise laws related to corporate loss carryback and carryforward, last week in the Senate Tax Committee.

The bill would change the net operating loss carryforward and carryback periods from the current back three years and forward seven years to back two and forward 20.  It was interesting to see the different perspective people have on allowing corporations to use their losses against future or past income.  Many in the hearing room wanted to allow greater availability to use the losses while some wanted to limit the use of the losses because of the effect on the State’s budgeting.  They feel that limiting the deductions for the losses lets the state smooth out the ups and downs in budget revenue and avoids large expenditures for tax refunds in years when the state is experiencing revenue losses because of a downturn in the overall economy.  The same argument could be made for not allowing the state to collect excess tax revenue in years when the economy is booming and creating surpluses.

In our minds, CPAs feel that deductions for losses should not be limited since they are real, hard dollar losses and the state only bears the burden to the extent of refunds of 6.75 cents on the dollar.  So we offered an amendment that we feel makes this bill more palatable. The amendment our lobbyist, Holly Franz, offered on our behalf:

  • Amends current procedure to provide that taxpayers electing a carryback or carryforward on their federal return automatically make the same election on their state tax return
  • Allows a taxpayer to elect a different carryback or carryforward on their state taxes if they affirmatively choose to do so

The benefits of this are it:

  • Simplifies the net operating loss election process for taxpayers
  • Reduces errors on tax returns
  • Is easy for the state to administer since federal return has to be attached to the state return
  • There’s no fiscal impact

The bill was amended in committee to increase the carryback period to three years and limit the carryforward period to 10 years, three more than the current seven years but much less than the 20 years in the original bill.  The carryback is limited to $500,000 per year. CPAs are inclined to think in terms of fairness to their clients while the folks in charge of the state budget think in terms of the short-term budget effect.  It’s interesting to see what happens when the interests of the two camps clash.

The bill is scheduled for third reading in the Senate tomorrow (04/12). Stay tuned for more information on this, and other bills we are monitoring on your behalf, as the Legislature wraps up.

Presidentially Speaking

By Annette Hill, MSCPA President 2016-2017

hill-annette-2016Hello fellow CPAs!  Happy Valentine’s Day!  I’m trusting you’ll take some time today to spend with your loved ones, especially your valentine!  Consider taking a breath to reflect on other areas in your life that cause you to feel grateful; home, health and relationships.

Many of you have asked us how it’s going with the search for a new executive director.  I’m happy to report that we are on schedule with the timeline set by our Strike Force leader, Brenda Byrnes. We are in the interview stage, having received numerous applications from qualified candidates and are on track to introduce you to a new executive director by our Annual Conference in June.

What about Jane?  Even more of you have inquired about Jane’s retirement and we assure you that you will have opportunities to celebrate with Jane, to congratulate and thank her for her many years of service to the Society.  Watch for details!

It is opportunity season for those of us in public accounting and no doubt many in industry, nonprofit, government and education are feeling the opportunity as well, wrapping up calendar year end activities and initiating 2017.  Our staff at the Society office have been closing the January 31, 2017 fiscal year and commencing the next one with issuance of dues statements.  Your statement hit your physical or virtual mail box on February 1st.

As you review the notice, you’ll see that our Society staff has done an outstanding job of detailing the five strategic pillars and the benefits your dues provide our members.

MEMBERSHIP tools and services, volunteer and leadership opportunities

SUSTAINABILITY and focus on being the most valuable resource for members

CONNECTION through Find-A-CPA, MontanaConnection.org, MSCPA.org, local and rural chapters, e-publications, social media and this blog

PROFESSIONAL EXCELLENCE with 52 live CPE courses, 4 conferences and thousands of webcasts

ADVOCACY with representation at the state Legislature, Department of Revenue, State Board of Accountants, IRS and AICPA.

What an inspiring and fitting list for our pillars! They guide our board of directors, staff, committees, task forces and all of our volunteers, charting the course for our mission.  That’s important and we need to keep it in front of us.  However, as you consider paying your dues this year, you might be asking yourself, “What’s really in it for me?”  I’ve spent a few moments considering the value my membership brings me.

In 20 years as a member, I’ve enjoyed benefits in all of the pillars and for that I’m grateful and have no doubt I have received much more than the cost of my membership dues.  One of my favorite benefits though, is really one captured in the MEMBERSHIP pillar.  “Tools and services” include our Society office and staff.  This is the benefit working for us every day that we may not even know is happening. Our Society office and staff are our best return on investment.

Have you called the Society office and been greeted with Heidi’s cheery and welcoming voice?  Have you experienced an issue with CPE and had Jean fix it for you?  Have you had Carol hold your hand as you worked through the paperwork to get your first peer review completed? Have you paused to giggle a little when you read the latest recipe for tax season mixology drinks on Facebook or learned what music Reidun cranks when she needs some inspiration? Attended a fun-filled, professional MSCPA conference? Reconnected with a CPA that left the state? (Thanks Margaret!) Finally, do you know the influence and the respect our illustrious executive director commands with our state legislators? Have you changed your job and in the stress of changing co-workers, locations and career goals, have you found some comfort in the familiarity of your MSCPA staff and office?  Have you remembered that these same people probably call you by name, recognize your spouse, know where you work and understand your passion for the accounting profession?

THIS is the value of membership.  I encourage you to renew (join if you are not currently a member) pay your dues and enjoy the benefits our greatest resource can bring you.  See you in Billings at the 104th Annual Conference!

 

 

Are you ready to make an impact?

by Jane Egan

Egan Jane color

Jane Egan MSCPA Executive Director

The 2017 Legislative Session begins January 2nd and promises to be just as busy and exciting as past ones.

Our current Governor, Steve Bullock (Democrat), was re-elected and Republicans hold a majority in the Senate and House.

The Governor has released his budget proposal which includes (among many other things):

  • a new tax bracket of 7.9 for people who make over $500,000 a year
  • increase in tax credits for new and expanding businesses
  • 6% tax on medical marijuana
  • Elimination of state capital gains credit for gains topping one million annually
  • A state earned-income tax credit for the working poor

Two of our committees—Legislation & Governmental Affairs and State Taxation—have been working on our legislative agenda for a number of months and are close to finalizing the details. We do know we will be initiating legislation to:

  • establish a corresponding deduction/subtraction on the Montana return for a credit on the Federal return that has an add back to income and
  • allow for CPA firm mobility

We have a Board-approved Legislative Policy and we are delighted to have Helena attorney, Holly Franz, on board as our lobbyist again this session.

Your MSCPA committees and staff work the legislative session for you—we want and need your participation and input. Contact me (800.272.0307) with your ideas and watch for notices by email and in eConnect on the many ways you can make sure the CPA voice is heard in this session.

Breaking News!

Part 1–Jane’s Big Announcement

Greetings Members,

Egan Jane color

Jane Egan MSCPA Executive Director

It is with mixed emotions that I announce my retirement from the Society on June 30, 2017.

On the one hand, I am excited to be retired and have the opportunity to explore new opportunities. On the other hand, I am not excited to be leaving this organization that has been so great to me. Few people start out with a goal to be an association manager. Many of my peers happened into this wonderful career the same way I did: the opportunity presented itself and I said I’ll give it a go. Best decision I ever made career-wise.

I have a lot to accomplish before I leave including assisting our State Taxation and Legislative and Governmental Affairs committee reach our goals in the upcoming legislative session and making sure the Society is in the best possible position for the future.

I have faith our leadership serving on the Search Strike Force will hire a new director who will help guide the Society into an exciting future. And remember, you still have Margaret, Jean, Carol and Heidi who always have your best interests in mind and do the most amazing work on your behalf!

I have learned you are the most remarkable people. You are smart, generous, giving and dedicated. You taught me how to be a better person and I thank you for letting me work with you all these years.

Jane

savethedate

Part 2–So now what . . .

With Jane’s retirement announcement last year, the Board of Directors created a Succession Strike Force. The purpose of the Strike Force was to create a plan and timeline  for naming Jane’s successor. The Succession Strike Force then morphed into the current Search Strike Force. The members are as follows:

• President Annette Hill
• President-Elect Dr. Josh Herbold
• Secretary Treasurer John Steinhoff
• Board Member Merna Lechman
• Past President Brenda Byrnes
• Past President Ann Deegan

Over the years nothing has struck more fear in the hearts of members of the Board of Directors than Jane’s retirement date! True to her word, Jane has given us ample notice and continued support in these early stages of the process. Her love for this organization and its members runs deep. We are sad to see that this time has finally come but we understand that it is an awesome time for her to retire, spending more time with family and her interests.

Many other CPA societies are undertaking this process right now or have just concluded a interestblueblurb
search. From these peers we have learned that the Executive Director position is a sought after one. We are optimistic that our first class organization, active membership and beautiful state will attract a solid pool of candidates.

From the timeline, you can see that our search process is straightforward. Our job posting will appear on various outlets including the MSCPA website on December 1, 2016. We will close the posting on January 15, 2017. From that point we shift gears into the full interview and hiring mode. We look forward to introducing our new Executive Director at the 2017 Annual Conference in Billings!

If you have any questions about the search process, please contact the strike force at searchstrikeforce@mscpa.org or reach out to one of us individually. We are all aware of the importance of this task and take it very seriously. After all this is our FUTURE! The MSCPA has only had two long-time directors in its 104 year history.

Legislative Session Preview

by Jane Egan, MSCPA Executive Director

Jane Egan MSCPA Executive Director

Jane Egan
MSCPA Executive Director

Did you know that the Montana Society of CPAs is the ONLY organization advocating on behalf of CPAs in Montana? We are constantly monitoring the issues that will affect you, your clients, your organizations and businesses. And the 2015 Legislative Session is going to bring us many opportunities to be that advocate for you.

MSCPA’s 2015 Legislative Policy reads:

MSCPA will:

  1.  Analyze and support, oppose or improve legislation directly impacting our profession,
  2.  Provide resources and commentary in the areas of tax policy and administration, economic development and business issues,
  3.  Provide technical information and/or analysis to legislators, agencies such as the Department of Revenue and other groups on proposed legislation, 
  4. Review proposed bills that fall under this legislative policy and agree to support, oppose or remain neutral. 
  5. May initiate and promote legislation affecting our profession and tax policy.

We will continue to develop our role to meet these objectives.

With this in mind, here is a preview of the issues we will be monitoring when the Session starts January 5th:

Tax Simplification
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. MSCPA’s Legislative and Governmental Affairs and State Taxation Committee members have been working with Sen. Tutvedt throughout the interim on a tax simplification bill he is proposing.  We will also be working with other legislators as they bring forward tax simplification bills.

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 will 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.

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.

Audit Threshold
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.

Tax Credits
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 155 introudced bills and 1,966 bill draft requests listed on the LAWS website. Of those, we have 132 on our watch list so far.

Holly Franz, MSCPA Lobbyist

Holly Franz, MSCPA Lobbyist

We have contracted with lobbyist Holly Franz again for the 2015 Session to help your voice be heard. Holly has lobbied on MSCPA’s behalf for many years now and she is an invaluable resource in our advocacy efforts at the Legislature.

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.

We’ll be publishing updates throughout the session. 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.

Advocacy Mondays
We also urge you to participate in Advocacy Monday conference calls, every Monday beginning January 5th at 7:00 a.m. throughout the session. All MSCPA members are welcome on these one-hour conference calls that outline the issues happening each week at the legislature. To join simply dial 888.289.4573 and use access code 8863665.

If you have questions or comments I want to hear from you. Please call 800.272.0307 or email Jane@mscpa.org.