State Activity Impacts Mobility

April 6, 2007

Several states across the country are addressing the issue of substantial equivalency in an attempt to ease the burden of CPAs trying to practice across state lines. The National Association of State Boards of Accountancy (NASBA) and American Institute of CPAs (AICPA) have issued revisions Section 23 of the Uniform Accountancy Act (UAA) (.DOC) to achieve a uniform national equivalency standard.

On April 6, 2007, the AICPA reported the following activity:

Tennessee: Amends Substantial Equivalency Law

In March, the Tennessee House passed SB 443 to amend the state's current substantial equivalency law to include "no notification" provisions. The bill passed the House by a vote of 96-0, and earlier in March passed the Senate by a vote of 30-0. SB 443 has been sent to Gov. Phil Bredesen, whom is expected to sign.

Upon Bredesen's approval, Tennessee will become the first state in 2007 to enact newly proposed UAA provisions 23 (a) (1)-(3). which remove the notification requirement and also subject licensees to automatic jurisdiction in the state.

Illinois: Governor Signs Mobility Legislation

UPDATED: On August 23, 2007, Gov. Rod Blagojevich signed SB 745, which is effective January 1, 2008. SB 745 passed the legislature with unanimous support. Provisions of the new law include:

• Out-of-state CPAs holding a valid CPA license in another state will not need to obtain an Illinois license, registration or temporary practice permit in order to practice public accounting in Illinois or hold themselves out as a CPA in Illinois.
• Out-of-state CPAs exercising the practice privilege above agree to comply with the Illinois Public Accounting Act and be subject to the disciplinary jurisdiction of the Illinois Department of Financial & Professional Regulation.
• Any CPA firm that does not have an office in Illinois but performs audit services for an entity headquartered in Illinois must hold a valid Illinois public accounting firm license.

Indiana: Legislature Expected to Pass Substantial Equivalency Bill

The Indiana House has passed a substantial equivalency bill, HB 1312, by a vote of 95-0. This week the Senate Corrections, Criminal and Civil Matters Committee favorably reported the bill to the Senate floor; a vote is expected in April. HB 1312 establishes no notification, as long as the CPA who wishes to do business in Indiana has a valid certificate or similar qualifications from another state.

The legislation is consistent with the revised UAA Section 23 provision, which removes the notification requirement.

Texas: Mobility Legislation Introduced in House and Senate

Mobility legislation has been introduced in both chambers of the Texas legislature. In the House, HB 2144 was filed in early March and referred to the House Licensing and Administrative Procedures Committee. The Senate bill, SB 1364, was referred to the Senate Business and Commerce Committee on March 20. Both bills would allow an individual who holds a certificate or license as a CPA issued by another state and whose principal place of business is not in Texas to have all the privileges of certificate and license holders of this state without obtaining a certificate.

The legislation amends the state's current mobility provision, and is consistent with the proposed revisions to UAA Section 23.

Virginia: Substantial Equivalency Model

The Commonwealth of Virginia is one of the only states practicing substantial equivalency. An out-of-state CPA can practice in Virginia without notification and fee, as long as he or she meets the education, CPA Exam and experience requirements of the Virginia Board of Accountancy (BOA), or has demonstrated those substantially equivalent requirements. Also, that person must consent to the jurisdiction of the BOA and its regulations, disciplinary procedures and authority.

Other States

Substantial equivalency legislation has also been introduced in Hawaii, Missouri, Oklahoma, Oregon and Rhode Island.

More information on practice mobility, including Virginia's regulations, is available here.