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.

Halfway There!

Friday marks the halfway point of the 2015 Legislative Session. This has been a very busy

Jane Egan MSCPA Executive Director

Jane Egan
MSCPA Executive Director

eight weeks for those advocating on your behalf at the Montana Legislature. So who is advocating for you?

We are having a great session so far with all of our priorities advancing – knock wood!

So let’s talk about the bills impacting the CPA profession and the position MSCPA has taken on each of them:

HB 44– Rep. Tom Berry

SUPPORT: Change Montana from a two-tier license (certificate and then license to practice) to a one-tier (license only – no interim certificate); eliminate any reference to LPA (they are a dying class); clarify firm registration (no separate registration for satellite offices); allow a fee for firm registration

WHERE IS IT: Passed the House (1/27), transmitted to the Senate


HB 184 – Rep. Greg Hertz at the request of MSCPA

SUPPORT: Exempt CPAs from Private Investigator License Requirements

WHERE IS IT?  Our first victory! SIGNED BY THE GOVERNOR (2/18)! Effective Date: October 1, 2015


HB 560 – Rep. Greg Hertz at the request of MSCPA

SUPPORT: Allow the Board of Public Accountants to change their fund structure from an appropriation to an enterprise fund in order to have more control over how they spend the funds they bring in from license fees.

WHERE IS IT? Hearing in House Business & Labor 3/11


SB 39 – Sen. Cary Smith

SUPPORT: Provide for the civil offense of bad faith assertions of a patent right including remedies and damages. This bill will curtail the efforts of patent ‘trolls’ or ‘patent assertion entities’ which purchase patents for the express purpose of filing patent infringement lawsuits against companies to get licensing fees or a legal settlement without actually making any goods or providing any services

WHERE IS IT? Hearing in the House 3/9


SB 76 – Sen. Gene Vuckovich (Yes, this is Dan V’s dad)

SUPPORT: Allow a licensing board to administratively suspend a license; allow a licensing board to ask the department to do this for them

WHERE IS IT? Transmitted to the Governor


SB 286 – Sen. Cary Smith

MONITOR: Prohibit a state agency from adopting rules that will burden a person’s ability to enjoy the person’s property rights or engage in a lawful business or occupation. We are concerned this bill might prevent our Board of Accountancy from regulating CPAs. We may oppose if this bill makes it to the House.

WHERE IS IT? Passed out of Senate committee


SB 390 – Sen. Elsie Arntzen

SUPPORT: Study fees the Department of Revenue charges boards — including the Board of Accountants

WHERE IS IT? Passed Senate committee


Now let’s change gears and talk about the Bills Impacting Tax Law

HB 359 – Rep. Ed Lieser

MONITOR: Adjust the inflation factor calculations for individual income tax

WHERE IS IT? Passed the House


SB 91 – Sen. Fred Thomas by request of DOR

MONITOR: Allow for reciprocal collection and offset of tax liability between the state and Federal government

WHERE IS IT? Tabled in committee at sponsor’s request


SB 167 – Sen. Dick Barrett

MONITOR: Revise the criteria related to the water’s edge election for corporate income taxes by changing the list of countries consider tax haven jurisdictions

WHERE IS IT? Senate Finance and Claims hearing 2/25


SB 170 – Sen. Dick Barrett

MONITOR: Allow two Montana taxpayers to file a joint state return, or a combined filing separately return, if they filed a joint federal income tax return

WHERE IS IT? Passed the Senate


SB 92 – Sen. Fred Thomas by request of RATIC

SUPPORT: Reform penalty and interest amounts to more closely mirror Federal

WHERE IS IT?  Passed the Senate


HB 379 – Rep. Greg Hertz

SUPPORT: Reform penalty and interest amounts to more closely mirror Federal  AND lower the statute of limitations on individuals, sole proprietors and partnerships to 3 years (currently 5 years)

WHERE IS IT?  Heard in House Taxation committee 2/12


SB 269 – Sen. Duane Ankney

SUPPORT: Lower the statute of limitations on individuals, sole proprietors and partnerships to 3 years (currently 5 years)

WHERE IS IT? Passed Senate Taxation committee


SB 212 – Sen. Scott Sales

SUPPORT: Revise the penalty and interest provisions for certain taxpayers who receive an extension for filing individual income tax returns; clarify they are based on tax due – not tax liability

WHERE IS IT? Heard in Senate Taxation


SB 6 – Sen. Fred Thomas for RATIC

SUPPORT: Clarify the right to request alternative dispute resolution methods including mediation

WHERE IS IT?  Transmitted to the Governor


SB 166 – Sen. Dick Barrett

OPPOSE: Eliminate the waters’ edge election for corporate income tax filers

WHERE IS IT? Committee vote failed; remains in committee


SB 171 – Sen. Bruce Tutvedt

SUPPORT: Tax Simplification! This bill will restructure the individual income tax, reduce rates for the corporate income tax and eliminates several credits.

WHERE IS IT? Passed Senate committees


SB 386 – Sen. Jill Cohenour

SUPPORT: Revise laws related to pass through entity simplification. MSCPA members worked extensively with DOR to reach a compromise – second tier entities will be subject to withholding or composite returns (consent agreement goes away); small and/or family owned entities may continue using the consent agreement; the PT-STM goes away!

WHERE IS IT? Newly introduced; Hearing in the House 3/10


In addition to these bills we are also monitoring 13 tax credit bills and four tax reduction bills.

We encourage you to share your voice with your legislators on these issues and we hope you’ll join us by phone Monday mornings for Advocacy Mondays.

If you have questions about any of the legislation mentioned above or any bills you hear about and think we should be monitoring please contact me: jane@mscpa.org or call 800.272.0307.

MSCPA is proud to advocate on your behalf!

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.

8 Issues That Could Change the Way We Do Business in Montana

Jane Egan, MSCPA Executive Director

Jane Egan, MSCPA Executive Director

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:

  1. 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.
  2. 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.
  3. 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.

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. 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.

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 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.

So please:

  1. 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.
  2. 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.
  3. 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.

What a difference a year makes . . .

by Margaret Herriges, Communications Director

It’s hard to believe that 2013 is drawing to a close. I still remember anticipating what we’d be doing when it turned a new century! Little did I know at that time that I’d actually be starting an adventure with MSCPA within a few months. After nearly 14 years working on your behalf, I count my blessings daily!

But at this time last year there was a different tone to the season . . .

  • Jane was already hard at work with the State Taxation and Legislative Committees, revving up our advocacy engine so we could protect your interests during the legislative session.
  • I was on pins and needles, working with the super folks on the Century Celebration Committee, trying to make MSCPA’s 100th anniversary celebration an event you would always remember. 
  • Carol was keeping us all financially prudent and making Peer Review run smooth as silk. 
  • Jean was busy preparing for the 2013 CPE Season and working like mad to get the calendar published by the end of January for our members in industry. Okay, that hasn’t changed . . . this very week she’s putting the finishing touches on a calendar that will be so beautiful and a great resource as well. 
  • And at this time last year, the voice you heard when you called the office was Kay Roos.

Thankfully we’re coming into an even numbered year so that means no legislature, but Jane and the folks on the State Tax and Legislative Committees have already started working on legislation for the 2015 session. Our advocacy efforts have never been stronger and we are launching into 2014 with ideas about tax simplification that will make it easier for people to comply with our voluntary tax system. You’ll be hearing a lot of information about that in the coming months.

The 100th Anniversary Celebration was an event to be remembered and I’m so honored to have coordinated the efforts to make it special for you. It was an event I will always treasure. We will be announcing the line up of speakers soon but mark your calendars for June 19 and 20, 2014 in Helena for the 101st Annual Meeting. In the last few months we’ve incorporated some major changes to our social media presence in an effort to make communications with you more vital and in 2014 we will make some huge changes to our web presence that will make www.mscpa.org a better tool than ever.

The State Board Profession Monitoring Program morphed into the MSCPA Peer Review and that gives Carol the opportunity to help even more CPAs throughout the state become more proficient, more professional at their work. This has been a big change for many of you and Carol is here to walk you through it all.

Time has never been more critical for each of you and because of that, Jean and the Professional Development Committee have been working to offer more webcasts on more topics. Our education model is changing and Jean has not only kept MSCPA current with the changes, she helps the entire Society blaze new trails for education options.

And we said our farewells to Kay (she’s doing awesome by the way) and welcomed Shannon Murray to the office as our new Secretary. We can’t wait to bring her to conferences and the convention to meet you all.

There are so many big and little changes that happen in a membership organization throughout the year. The one constant is our respect and admiration of our members. We are proud to work on your behalf and excited to bring you new tools and resources, more advocacy efforts and incredible education offerings. VALUE is the word we focus on these days as we strive to make everything we do more valuable to your in your accounting career.

This holiday season and throughout 2014 we hope your blessings are many and your worries are few. And if we can help with some of those worries please remember we are a phone call or email away.

Merry Christmas! And a wonderful New Year!