Results of CTCPA Advocacy Efforts for the 2017 Session

Results of CTCPA Advocacy Efforts for the 2017 Session

Several times during the session we asked you to contact your legislators and tell them how proposed bills would affect your profession, your company, or your clients. In each case, our clear and immediate outreach was highly effective. We spoke – and they listened! The results of that action appear below.  You can also view the full listing of the status of bills we have been actively tracking, addressing, and reporting on this session.

SB 1047 – Tax Preparer Penalties

SB 1047 would have transferred certain penalties normally imposed upon the taxpayer to the tax preparer/advisor.

When the Department of Revenue Services (DRS) put forth their proposed legislation this year, SB 1047 – An Act Concerning Tax Preparers and
Facilitators and the Department of Revenue Services’ Changes to the Tax and Related Statutes, there was one section contained in the lengthy bill that was of significant concern to the CTCPA. It concerned us because, in part, it would have transferred certain penalties normally imposed upon the taxpayer to the tax preparer/advisor.

We scheduled a meeting with DRS Commissioner Kevin Sullivan, staff from the Connecticut Bar Association (CBA), and members of both the Society and the CBA to express our concerns. In response to our concerns, Commissioner Sullivan requested that the penalty provision be removed from the legislation and agreed to work with the CTCPA and other stakeholders outside of the legislature this summer to try to address the DRS’s concerns. The provision was ultimately removed.

SB 1047 died, but sections were merged into HB 7312, which was adopted by the House and Senate and awaits the Governor’s action.

SB 1047 – Tax Preparer Registration

As is happening in several states, Connecticut’s DRS decided to pursue regulation of any tax preparer who is not currently regulated or an employee or assistant to a regulated tax preparer. SB 1047 contained a registration mandate as well as outlining several behaviors which are deemed prohibited conduct.

CTCPA supported these sections of the measure, which were merged into HB 7312. HB 7312 awaits action by the Governor.

 

SB 4 – Language on Forensic Examinations

Another measure that required our attention was proposal concerning the legislature’s desire to define what constitutes a “forensic audit.”

SB 4, An Act Concerning Municipal Electric Utility Cooperatives and Establishing a Municipal Electric Consumer Advocate, intends to increase public awareness and provide transparency regarding municipal electric energy cooperatives, in part by requiring a forensic examination on a regular basis.

We reached out to the our Valuation, Forensic, and Litigation Support Group, the AICPA, and several members who shared their feedback, including using the term “forensic examination” instead of “forensic audit” and some information regarding what such a forensic examination might include, with the legislature. Unfortunately, as often happens during the last few days of session, some of the language adopted is of concern to us. We are seeking to modify the language in the special session and will report back to members.

SB 4 awaits action by the Governor.

HB 6681 – Restricting CPAs from Representing Clients in Property Tax Appeals

HB 6681 – An Act Concerning Municipal Tax Appeals and Contingency Agreements, would have restricted the types of professionals that may value property or participate in a property tax appeal.

CTCPA put out a call for action via a Capitol Corner alert and members rose to the challenge. CTCPA staff and our government relations consultant Craig Leroy spoke to members of the legislature’s Judiciary Committee, and our members did, too. The end result was the leaders of the Judiciary Committee opted to hold the bill, effectively killing it.

As the legislative session comes to a close, anything can happen. Bills that were already killed often come back as amendments; this is exactly what happened with HB 6681.

Bonnie worked with legislators to broaden the proposed amendment, which initially allowed only certified appraisers to provide property valuation services for use in municipal assessment appeals, to allow certified or licensed CPAs to perform these services.

HB 6681 died and the amendment proposed to bring the issue back was not taken up.

 

Sales Tax on Services

While the Finance Committee has heard proposals on taxing professional services for many years, this year the push for adopting a sales tax on services came from Voices for Children.

They distributed materials to legislators arguing why Connecticut needs to tax more services, pointing to the significant amount of money such a measure would bring to the state coffers. CTCPA immediately responded by publishing a quick one-page fact sheet pointing out that only three states have a broad sales tax on business and professional services. We shared this with legislative leaders, members of the Finance and Commerce Committe, and other key legislators.

While there are some legislators who have indicated they would support such a measure, the majority expressed their opposition to such a tax at this time. Given the state’s fiscal situation, we are paying close attention to any tax discussions, especially sales tax matters.