The MACPA Board of Directors, Legislative Advisory Group and Government Relations Department continue to see the full benefit of the investment in a Lansing satellite office location as monitoring the on-goings of state government and advancing the integrity of the CPA designation remain top priorities.

MACPA’s top legislative priority is the pursuit of CPA license mobility legislation in partnership with the State Board of Accountancy and the Department of Labor & Economic Growth (see related article and MACPA Board Chair’s message). In addition, the MACPA remains committed to working with the Department of Treasury and the State Legislature on the implementation of the newly enacted Michigan Business Tax. Outside of these highly visible initiatives, the MACPA continues to ensure your voice is heard clearly regarding other matters affecting the profession.

Tax Relief for Costs Associated with Service Tax Preparation

Most businesses in Michigan remain perplexed with the timing of the passage and the ultimate elimination of the expanded Use Tax to include services. Many businesses incurred significant costs in preparing for this tax – costs that cannot be recovered.

The MACPA has endorsed Senate Bill 967, legislation to allow businesses to claim a credit against 2008 Michigan Business Tax (MBT) liability equal to an amount that business can verify as actual expenses incurred in complying with the short-lived service tax.

Public Accounting Firm Organization/Incorporation

In Miller v Allstate, decided May 31, 2007, the Michigan Court of Appeals held that if a corporation can be formed under the Professional Service Corporation Act, it may not form under the Business Corporation Act. The court interpreted "professional service" in section 2(c) of the Professional Service Corporation Act, MCL 450.222(c), as a nonexclusive list and concluded that a corporation must form as a professional service corporation if it is providing a personal service to the public that requires a license.

This court decision has a significant effect on the choices available to CPA firms and their clients when forming a business unit and, most importantly, may have an effect on the applicability of professional insurance for those entities deemed improperly organized.

A bi-partisan package of legislation (House Bills 5356-5358) was drafted to reverse the effect of Miller v Allstate and was unanimously passed out of the House of Representatives in December. Senate action is pending and the MACPA is working to communicate the imperative nature of immediately addressing this issue.

Regulation/Licensure of Commercial Tax Preparers

There is currently an effort to develop a regulatory or licensing structure for commercial tax preparers in Michigan as a means to deter criminals from improperly or fraudulently preparing tax returns. MACPA met with representatives from the Independent Accountants Association of Michigan (IAAM) in 2007 to communicate the MACPA’s position that any further certification and/or licensure of tax preparers would not solve the inherent problem, and would likely cause greater public confusion regarding the different professional designations, licenses and associated standards.

No legislation proposing a new licensed occupation has been introduced; however, the MACPA is monitoring this daily and has communicated the profession’s opposition.

The MACPA is committed to addressing the issue through taxpayer education including working with members of the State Legislature and in partnership with the Association of Latino Professionals in Finance and Accounting and the Accounting Aid Society on a pilot public awareness campaign based upon information needed by a taxpayer when hiring a tax preparer.

Public School Audit Reform

As the Michigan Legislature continues to examine means to reform government and provide more transparency in taxpayer resource allocation, two initiatives have been floated to reform school district requirements related to expenditures, ultimately affecting audit and other services.

Senate Bill 500, introduced by State Senator Buzz Thomas (D-Detroit) would require school districts to enter “contracts for services” into the competitive bidding process. The current version of the legislation includes all services and would therefore affect audit services. The MACPA is opposed to requiring audit services to be bid, based on the argument that audit fees would increase over time (not decrease as the legislation is intended) and audit quality would be in jeopardy. MACPA representatives met with Sen. Thomas to discuss the issue and it is expected that a new version of the bill, which will exempt audit services, will be introduced this year.

Additionally, House Bill 5083, introduced by State Representative Kim Meltzer (R-Clinton Twp.) would require disclosure of virtually all school district expenses on a web site, similar to what is already required of Intermediate School Districts.

The MACPA has assembled the right group of experts, continues to monitor action, and stands ready to advocate the profession’s position on school district audit reform.

If you have any questions on these or other legislative matters, contact the MACPA Government Relations & Regulatory Affairs staff at legislation@michcpa.org or 248.267.3710.

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