The State Board of Accountancy says it’s time to open up Connecticut’s borders to accountants from other states. And as the board works to promote legislation that will permit out-of-state accountants to crunch numbers locally, it is keeping smaller firms and skeptical lawmakers in mind, hoping to circumvent possible objections.
Regulatory boards across a number of states are working to open up their borders to certified public accountants, and Connecticut’s board is crafting legislation to do the same. Allowing outside accountants to work here may be viewed as heaping more competition on small firms in the state, and board members worried at their December meeting about non-Connecticut CPAs being allowed to more easily do work for Connecticut clients.
Currently, licensing requirements restrict CPAs from out-of-state to work in Connecticut, so many must turn down work offered their way. In many cases, obtaining a license from another state can be an onerous, months-long process, even though prospective clients need work done immediately.
Noel Allen, legal counsel for the National Association of State Boards of Accountancy who spoke at the board’s December meeting, said many out-of-state accountants without licenses here have long been doing work in Connecticut, particularly by using online services. This legislation would simply give Connecticut’s board the authority to better regulate such activities.
Under this law, an out-of-state accountant could be reported for violating Connecticut’s statutes, and the state board could issue fines and report the activity to that accountant’s home board.
But some potential downsides could come under scrutiny — including a likely loss of state revenue.
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Down Side
Giving outsiders a pass would mean that fewer accountants apply for a license here, so the state loses out on the $450 license fee. Those fees add up to several million in state revenue, and board executive director David Guay said Connecticut would likely lose a chunk of that if outside accountants had no requirement to pay up.
Another potential problem looms at Connecticut’s southern border.
Concerned about such a law’s effect on its accounting firms, New York’s board of accountancy rejected the idea of opening up its borders. That could pose a problem for neighboring Connecticut in particular; New Yorkers could do work here, but Nutmeg accountants wouldn’t have the same window.
But New York might prove to be an easier solution than it appears.
The Connecticut legislation would only allow access to accountants who are licensed in states that have roughly the same standards requirements for their accountants. All but six states qualify as being roughly equivalent to Connecticut — and New York is one of them.
That means that a New York accountant would have to get official blessing from the National Association of State Boards of Accountancy in order to practice here. That, some Connecticut board members mused, might make it just difficult enough to impede unfair New York competition.
