Wednesday, January 26, 2011

2011 Session Update: Tax Conformity, Financial Literacy and More

The Virginia General Assembly is addressing important bills that could affect you. Read on for updates from the Virginia Society of CPAs (VSCPA), and visit the 2011 Session Watch page for details on these issues as well as additional bills the VSCPA is monitoring:

Tax Conformity

As always, the VSCPA pushes for immediate, early passage of emergency legislation to conform the Commonwealth’s tax code to that of the Internal Revenue Code. SB 1384 and HB 1874 would advance conformity with the federal tax code from January 22, 2010, to December 31, 2010. HB 1874 passed the House January 20, and SB 1384 passed the Senate on January 24. Read more about the VSCPA's advocacy efforts and updates on the conformity bills.

Financial Literacy Graduation Requirement

Several bills introduced this year called for a delay in implementation of new graduation requirements, including the standalone economics and personal finance course — a course our students need now. The VSCPA actively opposed HB 1554, SB 810 and HB 2378 as they were introduced, and is seeking an amendment that would carve out the financial literacy graduation requirement. The VSCPA sent an alert on January 20, 2011, asking members to contact their legislators regarding this issue. If you haven't already taken action, there's still time to contact your legislator about this important issue. Read more about the legislation that could impact the financial literacy graduation requirement and the VSCPA's efforts to protect the requirement.

Credit Counselor Definition

Are you a credit counselor? Based on the current definition, you could be. And because Virginia statute requires licensure of credit counselors in certain circumstances, it is critical to clarify that the usual and customary services of CPAs and CPA firms are not included in the definition of credit counselor. That’s why the VSCPA asked Sen. Ryan McDougle to introduce SB 930, which would prevent CPAs performing usual and customary services from being unintentionally subject to additional licensure in the future, should the criteria requiring credit counselors to obtain a license be expanded. The bill passed the Senate on January 21, 2011. Stay tuned for updates.

Land Preservation Tax Credits

Several bills have proposed changes to the land preservation tax credit. Two of those bills would create a separate licensing requirement to conduct the transfer of a land preservation tax credit. Many CPAs with tax practices are routinely involved in the transfer of land preservation tax credits, and there is no need for an additional license on top of a CPA license. The VSCPA is working with the bill patrons to carve out CPAs from this requirement, and are also addressing general concerns that the creation of a license does not address the abuse of this tax credit, which appears to be related to the appraisal rather than the transfer process. Read more on this topic.

Enterprise Zones

HB 1599 and SB 1348 would eliminate an important part of the grant process for job creation and property in enterprise zones. The group requesting the bill indicated that the required agreed-upon procedure to be performed by the CPA negates the benefit of the grant if 20 or fewer jobs are created. That same group is drafting an amendment that would establish a threshold above which the agreed-upon procedure would still be required, which the VSCPA will evaluate when it becomes available. The VSCPA will monitor this legislation closely as it moves through the process. Stay tuned for updates.

Tax Credits for Donations to Nonprofits Providing Scholarships

GAAP or GAAS? It's important to be clear. Two bills, HB 2314 and SB 1194, both dealing with specific tax credits, inappropriately referenced generally accepted accounting principles (GAAP) in relation to an audit, and the VSCPA informed the bill patrons. HB 2314 patron Del. James P. "Jimmie" Massie III agreed to replace this reference with a reference to generally accepted auditing standards (GAAS). SB 1194 patron Sen. Mark D. Obenshain ultimately withdrew the bill for this session for other reasons, but would have corrected the reference had the bill proceeded.

Thanks, CPA Assembly Day Participants!

On January 18, 2011, CPAs from around the state gathered at the Virginia Capitol to meet with legislators on top issues impacting the profession during CPA Assembly Day. In the afternoon, participants observed the General Assembly in session, and the VSCPA was introduced on the floor of both chambers by VSCPA member Sen. Walter Stosch, CPA, in the Senate and Del. Jimmie Massie in the House of Delegates. CPA Day is an integral part of the VSCPA’s grassroots advocacy efforts. Thanks to all who attended.

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