By Jason Fox

This year , we ’ ve been actively working on two key bills , SB 1192 and SB 1501 , both of which are integral to our ongoing efforts to address Pass-through entity tax ( PTET ) provisions .

SB 1192 would have extended the PTET sunset date by a few years and SB 1501 would have added flexibility by setting a process to allow for estimated payments after the June 15 deadline .

Unfortunately , both bills , along with several others , have stalled for the year after being held on Suspense in the Assembly Appropriations Committee . Bills are held in Appropriations for various reasons , including policy considerations , fiscal concerns and political dynamics . However , the specific reasons for why a bill is held are not always made public , making the Appropriations Suspense process opaque .

SB 1192 and SB 1501 had progressed relatively smoothly , with no formal opposition or “ no ” votes . Amendments were also taken in policy committee to address concerns raised by the Franchise Tax Board ( FTB ) and Finance .

The FTB expressed concerns about costs to implement the changes , including updates to systems used to administer the program . Finance raised questions about the potential for taxpayers to intentionally delay PTET estimated payments , which they argued would disrupt the tax revenue projections and budgeting estimates . Lastly , there was a general hesitancy to pursue PTET changes when there was the possibility that additional PTET changes may be necessary in the coming years to address possible changes to federal SALT cap rules .

CalCPA and other stakeholders have worked to address these concerns with amendments and articulating the necessity for practical modification to simplify and add flexibility to the PTET framework , ensuring taxpayers can access and fully realize the intended benefits . Despite these efforts , the general sensitivity to state revenue and the budget lead to both bills not moving forward . Many other bills with valid policy objectives met a similar fate as legislators culled bills heading into the final days of the legislative session .

CalCPA plans to work toward new opportunities to address PTET flexibility in the next legislative session . For more on the status of PTET , see the CA Tax column on Page 17 .

CPA Next Proposal to Modernize Licensure Framework Later this month , the CBA will review and discuss draft legislative language to address two key components of the CPA licensure framework . The CPA Next framework ( see the August issue of California CPA ) is intended to modernize CPA mobility provisions and incorporate alternative and flexible paths to licensure .

CalCPA has been working closely with the CBA and other stakeholders on this significant proposal . Once the legislative language is approved , the CBA , working with CalCPA and others , can start to work with legislative leaders to identify options to introduce legislation in 2025 .

This is a key step forward in the long-discussed licensure efforts to help support CPA pipeline efforts . We encourage you to continue to follow CalCPA communications to stay up to date on these developments and where you can plug into support this important work .

Save the Date : CalCPA Legislative Summit and CPA Day is Feb . 5 The annual Legislative Summit and CPA Day is your opportunity to advocate for your profession and the issues that matter most to you , your clients and your community . The summit provides a unique opportunity to connect with lawmakers , share your expertise and voice your concerns about key legislative proposals that impact the CPA profession .

During the summit , CalCPA will create opportunities to met with legislators to discuss topics such as tax policy , regulatory changes and the importance of maintaining high standards in the accounting profession . These conversations are crucial in ensuring that the voices of CPAs are heard in the legislative process , helping to shape policies that support the profession and protect the public interest .

Circle the date on your calendar for this important event that you will not want to miss and keep an eye out for additional detail on how to attend .

Next Capitol Beat is Oct . 8 It ’ s not too late to sign up for the next Capitol Beat webinar . This will be our pre-election episode where Sacramento insiders will share insights on the upcoming election and what you need to know to be an informed voter this November . Registration is free for CalCPA members : calcpa . org / membership / free-cpe .

Jason Fox is CalCPA ’ s vice president of government relations and public affairs . You can reach him at jason . fox @ calcpa . org . www . calcpa . org SEPTEMBER 2024 CALIFORNIA CPA 11