MIKE NELSON
2021 ADVOCACY OUTLOOK
ADVOCACY 2020 was certainly full of surprises and unprecedented challenges. The WSCPA advocacy team and our member volunteers, have been advocating for CPAs every week (not an exaggeration) during a year of unparalleled legislative and regulatory flux. Now that the legislative session is underway, here are our advocacy priorities for 2021.
Budget Shortfall After the state and country first went into a lockdown it was projected that the state’s budget would be facing a more than $8 billion dollar shortfall through June 2023. Over the summer and through the winter that number has fallen to just over a $2 billion dollar deficit. While still significant, that number is considerably better than only a few months ago and importantly, not projected until the 2021-2023 budget, which means the need for immediate revenue increases before June of 2021 is diminished. State and federal aid will be a crucial part of an economic recovery now and once COVID-19 vaccines are widely available. Current hope is that Washington will receive federal funds to distribute between state and local governmental organizations. Depending on how much or if any is earmarked for the state to spend, the legislature may look at other revenue options to provide more aid to struggling families and businesses in the coming months. Several proposals for this additional revenue we continue to watch are increases in the B&O rates, a sales tax on professional services, a payroll tax, and a capital gains tax.
Tax Structure Reform Beyond any revenue needed for budget deficits and economic recovery packages, we continue to participate and work with the Tax Structure Workgroup (TSWG) and the Technical Advisory Group (TAG) as they examine the overall tax structure of the state. The goal of these groups is to one day propose sweeping changes to how the state taxes individuals and businesses. Together the groups have looked at how different types of taxes could be implanted to replace Washington’s existing sales, property, and B&O taxes. At their December meeting the TSWG reviewed economic research into the various types of personal and corporate income tax streams as well as value added and margin taxes that they may consider going forward. If you would like to review any of the past meetings or presentations, you can find them online at wscpa.org/tswg. In 2021 as the TSWG works toward providing the legislature with recommendations of which reforms should be implanted, it will convene meetings and gather feedback from stakeholders across the state
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on these various types of taxes. If you would like to be involved in this process, please let me know.
Licensure Standards Our profession continues to face challenges to our licensure standards. During the shutdown there were repeated calls to look into the requirements for licensure in a number of service industries. While schools and other facilities that used to provide these tests, trainings, and certifications were shut down new entrants into some industries were all but blocked for most of 2020. One of the proclamations signed by Governor Inslee waived the bar exam requirement for new lawyers this year. This has raised many questions about the requirements for even professional services. With this backdrop we expect to see continued legislation that would damage the CPA license and our profession’s mobility.
Virtual Legislative Session In addition to the multifaceted revenue and licensure issues facing Olympia, the first virtual legislative session in our state’s history is being held this year. Legislators will be navigating all new procedures in this virtual environment, from speaking on a bill on the floor to having a conversation with colleagues during a committee meeting. Communication will be the most important avenue to support or oppose legislation in 2021 but also the most difficult. That is why the relationships our members have been building and maintaining all summer and fall will be even more important. We will need to have members ready in case we need to communicate with legislators quickly during the session. If you have a relationship with a legislator already or would like to be involved, please reach out to me.
Washington State Board of Accountancy (WBOA) As he had announced previously, Charles Satterlund is retiring as the Executive Director of the WBOA at the end of January. Governor Inslee started soliciting applications for his replacement in December and the WSCPA has been working with his office to make sure that CPAs are involved in the selection process moving forward. With all of the uncertainty surrounding the profession and politics it is more important than ever to contribute to the CPAPAC. Donate today and we can continue to build the vital relationships that help us influence the legislation that comes through Olympia. Mike Nelson is WSCPA Manager of Government Affairs. You can contact him at mnelson@wscpa.org.
The Washington CPA Winter 2021
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