Gail Sparks Pitts 2007-2008 MACPA Chair of the Board

The MACPA has been receiving considerable member feedback regarding the expansion of Michigan’s sales and use tax to include various business and personal services. It’s important for members to be aware of the MACPA’s direct involvement in this issue and we want to keep you as up-to-date as possible as discussions evolve in Lansing.

Although current interpretation of this new law considers traditional CPA-provided services like auditing, accounting and tax preparation as non-taxable, the new law includes “consulting services” and others areas that reach into our members’ work. Further, the new law is extremely ambiguous, providing little clarity relative to what is and what is not taxable.

From the beginning, the MACPA has garnered input from member firms of all sizes, as well as from members in business and industry. Based upon your input and support, the MACPA has been actively involved in making the Granholm administration, the Department of Treasury and state legislators more aware of the unintended consequences associated with this new tax. Our web site contains links to documents that summarize problems with the new tax.

More pressing than efforts to fix the new law, though, is the MACPA’s top priority: the MACPA supports efforts to eliminate the service tax. You will continue to see press and pressure from organizations, including the MACPA, for complete elimination of this tax. Read the top story in this issue of Leaders’ Edge for more information.

Through actions this week, both houses of the State Legislature have made their intentions known – they wish to repeal the services tax. Such a repeal would come with a approximately $750 million price tag.

The MACPA is monitoring all conversations regarding these issues, including how to make up this deficit. Our legislative team and members of our State and Local Tax Task Force – essentially MACPA’s service tax SWAT team – are constantly in touch with legislators, their staff members, and with other government officials.

Until the service tax is repealed, as we learned last week at our Michigan Tax Conference, the Department of Treasury must continue to move forward in anticipation of implementing the tax. It’s also important for the MACPA, as your association, to prepare for what might happen. The success of last week’s Tax Conference is testament to the MACPA’s commitment to provide members with critical information.

As soon the Department issues new guidelines, FAQs and other clarifications, the MACPA is providing the information to members via our web site, CPE programs and special communications. We will continue to prepare you for this tax until it is repealed.

At the same time, the MACPA has ramped up educational programs and communications to provide vital information on the new Michigan Business Tax taking effect on January 1, 2008. Visit this page on our web site for the latest updates and to find CPE programs to help you prepare for the MBT. We are also continuing our efforts to move forward with CPA license mobility legislation.

The MACPA Board of Directors, Legislative Advisory Group and staff are doing all that we can to ensure the voice of Michigan’s CPA profession is heard loud and clear in Lansing. Please feel free to contact any board member or our legislative team if you have questions or concerns.