Update on California practice privilege requirement.

Much attention has been focused on the California Board of Accountancy's new Practice Privilege Notification Requirement that became effective on Jan. 1, 2006. The new rule requires out-of-state licensees that are providing services for Calif. clients, including preparing business or fiduciary tax returns, to file a Practice Privilege Notification Form and pay a $100 practice privilege fee.

The AICPA has worked closely with the California Society of CPAs to support their efforts to find a resolution to several issues associated with the new requirement. Additionally, state CPA societies across the country communicated concerns about the requirement and how it has impacted CPAs in their states.

The California Board of Accountancy made recommendations to help provide some relief from the requirement during a meeting in Feb. and reaffirmed its recommendations at a meeting in Mar. The process to make these changes is just beginning, as legislation must pass through both the State Assembly and Senate of the California Assembly and then be signed by the governor. The AICPA will keep members updated on this and other state licensing issues on our Web site at www.aicpa.org/statelicensing.

The AICPA has long recognized the need for greater ease of mobility across states lines for CPAs to practice both in person and electronically in another state. The requirements to practice public accountancy vary in each state, and it is the responsibility of each licensee to comply with the laws...