Spring is sprung: Legislature gears up for a busy session.

• Author: Fox, Jason
• Position: CapitolBeat

Spring is here and the California Legislature is in full swing as committees have begun to hear and act on proposed legislation. It's been a busy beginning of the year and will only get busier as the legislative session rolls on. CalCPA has positioned itself, through the integral help of member advocacy efforts, to be the voice for CPAs in all matters relating to the profession. We'll continue to work diligently to ensure that CPAs are heard and fairly represented as legislation continues to be developed.

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Tax on Services Bill Introduced

Tax on services continues to be a topic of discussion in the Legislature. A recently introduced bill, SB 640 (Hertzberg), proposes to enact a sales tax on services, including those provided by CPAs.

While the bill does not articulate how such a complex shift in the tax burden would be accomplished, the introduction of this legislation keeps the issue on the radar within the public policy arena--particularly as tax reform conversations heat up.

Similar, far-reaching tax-on-services proposals have been introduced in the past. These proposals have been characterized as a way to broaden California's tax base to address a volatile stream of tax revenue. However, the proposal would impose an extremely complex shift in the tax burden to raise billions in new tax revenues.

The grassroots efforts of CalCPA members continue to be instrumental in making sure that CPAs are not unfairly treated or harmed should a tax on services proposal take a more substantive form. At this year's CPA Day at the Capitol, CalCPA members reiterated concerns with sales tax on services including an increased cost to comply with the law, the competitive disadvantage for Calfiornia providers it would create, the negative impact on small business the proposal could have, as well as the costly administrative burden of such a proposal.

CalCPA will continue to actively communicate the significant concerns with this proposal to legislators.

Committee on Taxation Comment Letter

The CalCPA Committee on Taxation (COT) recently joined the Texas Society of CPAs and the Tax Section of the Texas Bar Association in sending a comment letter to the IRS. The comment letter raises concerns California CPAs have with recent revisions to the IRS Internal Revenue Manual that limit the availability of in-person appeals conferences between a taxpayer and the IRS.

While the COT supports IRS efforts to implement new technologies to reduce costs...