CPA Mobility - Word is Spreading that it Doesn't Make Sense
Word is spreading that “no notice, no fees, (no enforcement)” CPA mobility does not make sense for Hawaii, as evidenced by the following Pacific Business News article published on February 12, 2015.
Hawaii bills on CPA mobility face opposition
Feb 12, 2015, 1:46pm HST
Jason Ubay Reporter- Pacific Business News
Two bills scheduled to be heard by a Senate committee Friday would authorize out-of-state certified public accountants without a Hawaii license to do business in the state, but both face opposition as some accountants say it will outsource jobs and result in lost CPA licensing fees for the state.
Hawaii is the only state without an individual CPA mobility law.
The Hawaii Association of Public Accountants said in written testimony that the bill would result in outsourced jobs, lack of consumer protection by lowering CPA licensing standards, reduce the Hawaii Board of Public Accountancy’s control of current Hawaii licensed out-of-state CPAs, and lower tax collections from out-of-state CPAs who would no longer be required to proved general excise tax numbers on permit applications and renewals.
In written testimony, Rep. Isaac Choy, D-Manoa-Moiliili, who is also a CPA, said, “This bill gives the advantage to large international firms to take our jobs, return to the Mainland, sometimes not even paying our taxes. Why would you want to attend our local university to train in accounting if you must move to the mainland because accounting jobs would only be available in large regional firms?”
Senate Bill 1266, introduced by Sen. Rosalyn Baker, D-South Maui-West Maui, and its companion bill, House Bill 1281, introduced by Rep. Angus McKelvey, D-West Maui-North Kihei, also allows for out-of-state CPAs to practice in Hawaii, but requires a certificate of insurance for professional malpractice for no less $2 million, and violators of the provisions not related to licensing would be guilty of a class B felony.
The Hawaii Association of Public Accountants also opposes S.B. 1266. In written testimony, it said if the law passes, there are three options for out-of-state CPAs: obtain a temporary permit, obtain a Hawaii CPA license or the “no notice, no fees” temporary CPA mobility.
“Is this third ‘no notice, no fees’ option a good option for Hawaii? NO,” it said. HAPA also mentioned that over 600 out-of-state CPAs have a Hawaii CPA license, or roughly 22 percent of the state’s 2,750 licensed CPAs.
Ronald Heller, a director at law firm Torkildson Katz Moore Hetherington Harris, also opposed S.B. 1266 because it applies greater penalties to an out-of-state CPA than to a local CPA for violations, which would be unconstitutional.
“Moreover, it is unreasonable and excessive, because under existing law, tax crimes are generally class C felonies, not class B,” wrote in testimony. “Finally, if actually read literally, S.B. 1266 would make it a Class B felony offense to violate any Hawaii tax law, even if the violation is an innocent mistake and not a willful act.”
Both bills will be heard in the Senate Commerce and Consumer Protection committee on Friday at 10 a.m.
Jason Ubay covers tourism and finance for Pacific Business News.