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 and requirements in every jurisdiction in which they provide services for clients. Unauthorized practice in another state can be cause for discipline against a CPA's license in their state of residence.

Our "State Mobility Licensing Requirements" document assists individuals and firms with questions concerning practice requirements in states where they are not currently licensed or do not have a firm permit. Its information is based on research obtained from accountancy statutes and rules throughout the 50 states and the District of Columbia. While this document is non-authoritative, it may be used as a starting point for licensees/firms to obtain basic licensing information concerning a particular state. The AICPA State Regulation and Legislation Team suggests that for more information, licensees should contact the state board of accountancy or the state CPA society where they are planning to provide services to clients. View the document at www.aicpa.org/mobility.

AICPA members who have questions concerning the Practice Privilege issue or other states' licensing requirements may contact the AICPA for guidance:

[phone] 800/839-2715

[email] [e-mail]