CPAs go to bat for profession in Annapolis

Legislators indicate support on important issues during CPA Day 2006

By Richard Rabicoff
MACPA Public Relations Manager

ANNAPOLIS — On Jan. 25, Annapolis seemed like one CPA-friendly town.

Perhaps it was the copies of MACPA’s attractive 2006 Financial Fitness calendar — hand-delivered the week before — that put legislators in such a welcoming mood. Maybe it was the unseasonably mild weather, or the exceptional economic relevance of the MACPA’s priority issues this time around.

Whatever the cause, a strong majority of state legislators reacted favorably to the profession’s positions on a number of key bills. One delegate even suggested that the MACPA hold a workshop to educate lawmakers on financial issues. And two state senators volunteered to co-sponsor one of the bills.

Chalk up yet another rewarding CPA Day in Annapolis for the more than 80 MACPA members who met personally with their legislators. This year, members spoke out on four issues of critical importance not just to the profession, but to taxpayers and businesses statewide:

Deferral of payment for electronic filing: The MACPA has been working with the Comptroller’s Office to increase the number of tax returns that are filed electronically. Maryland has one of the lowest e-filing rates in the country, but rather than make e-filing mandatory, the Comptroller’s Office has taken proactive steps to work cooperatively with the profession. The Comptroller is willing to extend the deadline for paying taxes due to April 30 as an incentive for e-filing individual returns. This will benefit taxpayers as well as the Comptroller’s Office by actually saving time in the processing of the payments received.
Recoupling federal deductions for estate tax and Section 179: A number of our members have said the current decoupling provisions are burdensome not only to CPAs but to their small business clients as well. Legislation to recouple with the federal tax provisions would help Maryland for the following reasons: 1) It will reduce the costs and complexity of complying with the current law. These costs burden, almost exclusively, Maryland’s small business community. 2) It will put small businesses on a level playing field with larger corporations. 3) Maryland should not suffer any permanent decrease in tax revenues from this bill. Rather, there is a shifting of revenue between fiscal years. 4) It would bring Maryland into uniformity with Virginia and Delaware tax law.
Double taxation for flow-through entities: Maryland residents who own businesses that operate out of state as flow-through entities are credited for taxes paid to the other state, but only to the extent of the Maryland state rate (4.75 percent). The reduction does not consider the local rate. This results in double taxation if the out-of-state rate exceeds 4.75 percent. It is a disincentive for business owners to locate in Maryland. CPAs believe Maryland residents should be allowed a credit against income in the full amount of the tax that has been paid in the other state up to the total Maryland state and local income tax.
The creation of a "special fund" for the State Board of Public Accountancy: Fees paid by licensees for the privilege of practicing public accountancy would cover the cost of administering the State Board, thus giving the Board the resources it needs to carry out its duties.

Familiarity breeds receptivity

By now, CPA Day in Annapolis is not just an annual event; it’s an experience both CPAs and their legislators find gratifying and stimulating.

Take Angelo Poletis, CEO of Clifton Gunderson, who found the staff of Sen. Edward Kasemeyer (D-Baltimore and Howard counties) waiting to greet him at the door.

“We are a known quantity to our legislators,” Poletis said. “They recognize that we are trying to give them perspective, not just jamming information down their throat.”

Steve Wiseman of Wiseman & Associates echoed those sentiments. “They see us every year,” he said. “They know us and they know that our issues affect not just CPAs but our clients, who are also their constituents.”

Equally important, legislators are learning what distinguishes CPAs from the rest of the pack. Lisa Cines of Aronson and Company and Jerrold Garson were pleased that Sen. Robert Garagiola (D-Montgomery County) stressed that he knew the difference between a CPA and an accountant. Perhaps he’s been reading the useful information packet MACPA members drop off every year. Or maybe he had seen the Annapolis commuter trolleys that sport a billboard on one side that reads, "Your doctor is certified. Your lawyer is certified. Shouldn't your accountant be certified?"

Getting down to brass taxes

Though CPA Day is a unique opportunity to meet and greet one’s legislators, it’s also a time to talk issues. Early in the session, many lawmakers had had little opportunity to brush up on upcoming bills. Del. Joanne Parrott (R-Harford County) “specifically requested position papers with our simple for / against position,” said MACPA members Brian Lutters and James Stangroom.

And Aloyse Demuth enjoyed her “in-depth discussion regarding recoupling” with Del. Joseph Vallario Jr. (D-Calvert and Prince George’s counties), who appreciated the overview.

CPAs also learned about and addressed concerns about the impact of federal estate tax recoupling on the state economy. Sens. Brian Frosh (D-Montgomery County) and Leo Green (D-Prince George’s County) and an aide to Del. Mary Conroy (D-Prince George’s County) questioned the bill’s revenue impact. Del. Brian Feldman (D-Montgomery County and himself a CPA) told MACPA member Al DeLeon of DeLeon & Stang that he would need to examine “the fiscal impact” before committing to support the bill.

The educational value of CPA Day was not lost on lawmakers. Take Del. Warren Miller (R-Howard County), who “recommended that the MACPA do some kind of training for legislators because many of them do not understand business and taxes.”

The double taxation bill produced a positive response. Sen. Phillip Jimeno, (D-Anne Arundel County) and Sen. Green expressed interest in introducing the bill, a hugely affirmative gesture and a tribute to the forceful presentations made by MACPA members Jan Clark and Diana Smith.

Success stories like these are the reasons why CPA Day has become one of the MACPA's most rewarding annual events. When the association lobbies in Annapolis, it does so on behalf of its members. The more members who take part in CPA Day, the more powerful a legislative force the MACPA becomes.

The day's events were followed by a luncheon that gave CPAs a second opportunity to speak with their legislators, this time in a more informal setting. More than 100 senators and delegates took part in the meal.

Once again, CPA Day satisfied the appetites of Maryland legislators — most notably, their appetite for useful information from some of their most valued constituents.

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