Special 2019 Year-End Legislative Update

Jan 17, 2020


Thank You for a Great Year

The PICPA government relations team thanks you for your commitment to our advocacy efforts throughout the 2019 year. As always, we aspire to build upon the successes we achieve and make each year better than the last. We are excited to report that 2019 was a very successful year, and we couldn’t have done it without you, the 20,000 members of the PICPA. The role you play in advocating for your profession is truly invaluable. Cheers to another decade and many more opportunities to fight for CPAs in Pennsylvania!

 

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PICPA Ends 2019 with Major Tax Legislation Victory

Legislative victories do not come easily in Harrisburg. A quick inventory of the halfway point of the 2019-2020 session shows that state lawmakers have introduced nearly 3,000 bills (2,028 in the House and 936 in the Senate) thus far, with only 118 of those being signed into law. That translates into about 4% of the non-budget-related bills making their way through the process.

It was no small feat, then, that the PICPA, working with our allies in the General Assembly, was able to secure important legislative victories in 2019. The PICPA initiated two bills that became law and assisted on several other significant initiatives.

  • Act 90 of 2019 – On Nov. 27, Gov. Tom Wolf signed into law legislation amending Pennsylvania’s tax code that will help both taxpayers and practitioners deal with unnerving past-tax-owed letters from the Department of Revenue (DOR). In many cases, these notices are for decades-old tax filings, and the records for these far-off years are long gone. When the taxpayer and their practitioner cannot prove that he or she, in fact, filed a return for the year in question, typically the only recourse has been for the taxpayer to pay the tax owed and any interest and penalties. Act 90 (previously House Bill 17) was the culmination of more than a year’s work over two legislative sessions of the General Assembly. The bill passed both the House and Senate in bipartisan fashion – 178-9 and 48-1. The law, which is similar to federal law, establishes a 10-year collection window for taxes owed to Pennsylvania, and the statute of repose goes into effect Jan. 1, 2021. The provision applies to all taxes collected by the DOR, except the inheritance tax. Exceptions include, but are not limited to, cases of fraud or willfully failing to file a return.
  • Act 13 of 2019 – The PICPA notched a legislative victory in the current fiscal year tax bill. Championed by PICPA member Rep. Keith Greiner, CPA (R-Lancaster), House Bill 706 was amended into omnibus legislation, House Bill 262, and was signed into law as Act 13. The Greiner/PICPA amendment to the Tax Reform Code provides that if the executor of an estate and the trustee of the trust make an election under Section 645 of the Internal Revenue Code to treat the income of a trust as part of the estate, the fiduciary may make and file a joint state tax return for the estate and trust. If a joint return is filed, the tax liabilities of the estate and trust shall be joint and several. This provision applies to taxable years beginning after Dec. 31, 2019.

In addition, PICPA held another successful Day on the Hill event where members met with their state legislators, we fought to protect CPA licenses from unintended consequences of the licensing deregulation movement, we offered technical input on numerous bills and amendments, and we provided written comments on various proposed regulations. The PICPA held several meetings with the DOR, providing input on many key initiatives. The PICPA also hosted a series of quarterly legislative update webinars to keep members informed of legislative happenings in Harrisburg.

See our full summary of the year’s advocacy efforts. 

 

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CPA-PAC Update

The Certified Public Accountant Political Action Committee (CPA-PAC) is a bipartisan, member-managed organization representing CPAs in public practice, industry, and government, as well as new and veteran members of the profession. CPA-PAC is the only PAC to specifically represent the interests of Pennsylvania CPAs.

In 2019, thanks to generous contributions from PICPA members and firms, we raised more than $200,000, one of our best years in recent history. Your funds supported over 120 elected officials, on both sides of the political divide, who support CPA-friendly stances.

As always, we continued to support our CPA legislators – Sen. Pat Browne (R-Lehigh), Rep. Mike Peifer (R-Pike), Rep. George Dunbar (R-Westmoreland), Rep. Keith Greiner (R-Lancaster), Rep. Frank Ryan (R-Lebanon), and Ben Sanchez (D-Montgomery). These legislators are often our strongest allies in promoting and protecting the CPA profession.

In 2020, 203 seats in the Pennsylvania House, 25 seats in the state Senate, and three row offices are up for reelection. In addition, a high-profile presidential election will be topping the ticket. As we enter into this highly charged election year, we plan to continue to support friends of the profession on both sides of the aisle. As always, we appreciate your generous contributions to the CPA-PAC and look forward to another successful year.

Additional information will be provided in the 2019 CPA-PAC Annual Report, which will be issued this spring. 

 

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Relationships Strengthened on State, Federal Levels

Last year, on Jan. 1, 2019, the composition of the Pennsylvania General Assembly underwent a major transformation, with 20% of its members taking office for the first time: 43 new representatives in the state House and seven new legislators in the Senate.

Building relationships with the newly elected officials and maintaining existing relationships was one of our primary goals in 2019.

We conducted meet-and-greet meetings with 44 new members of the state legislature. We also hosted a new legislator breakfast event in April. Several new legislators joined us, and all new members received a video follow-up

We are happy to report that, as a result of our efforts, we were able to partner with several new legislators on financial literacy efforts and hosting workshops across the state. We held programs with Rep. Delloso (D-Delaware), Rep. Cox (R-Berks), Rep. Isaacson (D-Philadelphia), and Rep. O’Mara (D-Delaware) is planning a financial literacy event for the end of January.

This past year we also met with 17 of Pennsylvania’s federal-level elected officials. These meetings occurred in Washington, D.C., and at district offices, and they proved to be tremendously successful. Via our advocacy efforts, 11 members of the Pennsylvania’s congressional delegation signed on as co-sponsors of the Fiscal State of the Nation Resolution, three sent letters to the IRS in support of establishing a practitioner services division, and one signed on as a cosponsor of IRS disaster relief legislation, proving that our efforts paid off.

Relationship building is key to our efforts, and we plan to continue making this a priority in 2020 and beyond.

 

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Midsession Update: Looking Ahead to 2020

As always, ensuring the CPA profession will be well-protected tops our list of priorities. In 2020, the political environment will be turbulent and raucous, and we must ensure that any changes proposed will ultimately benefit CPAs in Pennsylvania.

The PICPA has several priority issues for the current 2019-2020 legislative session, and we have already been successful in achieving the following:

  • Amending the state’s tax reform code to allow a combined income tax return for an estate and revocable trust (Act 13 of 2019, see above).
  • Establishing a 10-year tax collections statute of limitations (Act 90 of 2019, see above).

The following efforts remain and, as always, we will need your support and backing:

  • Combat unintended consequences of delicensing efforts – In 2019, a growing licensing alteration movement gained traction in Pennsylvania. Gov. Tom Wolf signed into law Act 41 of 2019, which requires licensing boards and commissions under the Pennsylvania Bureau of Professional and Occupational Affairs (BPOA) to provide licensure by endorsement to applicants who hold similar licenses in other states. Some out-of-state efforts, however, have been overly broad and threaten the value of the CPA license. We remain vigilant in monitoring these concerns.
  • Clarify new and complicated withholding obligation on Pennsylvania businesses from Act 43 of 2017 – We are working on a proposal in the legislature that would streamline the 1099-MISC withholding requirements of nonresident income.

We look forward to continuing work on these efforts, and anticipate many successes in the second half of this legislative session.

 

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New Leaders Take Helm of PICPA Committees

This new season brings change to several PICPA government-relations-related committees. First and foremost, a tremendous thanks is due to our 2019 government relations committee chairs – Bill Lazor (CPA-PAC), Jeff Spengler (State Taxation), Sean Brennan (Federal Taxation), Charles Waring (Legislation), J. Andrew Weidman (Fiscal Responsibility Task Force), and Donald Pierce (Local Government Accounting and Auditing) – for their exceptional work and dedication to our efforts throughout 2019.

As we look forward to 2020, we welcome a number of new committee chairs. Kenn Stoops, managing director at Deloitte Tax LLP, has stepped into the role of chair of the State Taxation Committee; Cheri Freeh, partner with Hutchinson, Gillahan & Freeh PC, is chair of the CPA-PAC Board; and Mike Radich, founding shareholder and president of MGR CPA & Consultants, is chair of the Federal Taxation Committee.

We thank all our volunteers for their hard work and continued dedication to our efforts, and look forward to making 2020 another successful year!

 

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