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Tax Talent Management: States Propose Swifter CPA Certifications

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Here’s some interesting news about a profession that represents a primary source of tax expertise: Minnesota and other states are considering ways to ease the shortage of accountants, including a reduction in the number of college credit hours required to become a licensed CPA, according to The Wall Street Journal. 

Most states currently require would-be CPAs to accumulate 150 hours of college credit hours, which translates to five years in school. The Minnesota legislature is considering bills that would allow graduates to skip the fifth year. Four-year degree holders would be able to accumulate two years of professional experience, and then take the CPA exam. Alternatively, they could acquire one year of work experience and take 120 hours of professional-education courses before taking the CPA test.

The bill faces opposition from industry groups, including the American Institute of Certified Public Accountants (AICPA), according to the article, on the grounds that CPAs licensed in Minnesota couldn’t practice outside the state, and big accounting firms have clients coast-to-coast. CPA mobility is the term used to describe CPAs’ ability to qualify for jobs that require the certification in any state due to uniform licensing requirements. That said, Ohio requires only 120 hours. Plus four years’ work experience, a score of 670 or higher on the Graduate Management Admission Test and passing the CPA exam, according to one of the Journal’s sources, and Ohio accountants have had no barriers to practicing nationally.

In South Carolina, a task force is evaluating whether the state could approve CPAs from other places to practice locally, even if they have fewer than 150 college credit hours.
 
In New Jersey, a pilot program is underway that substitutes one year’s work experience for the fifth year of college coursework; where students would earn college credit hours on the job, the Journal reports.

As we are well aware, there are a high number of accountants and CPAs in tax departments. For me, relaxing of the current standards could significantly close the gap of the labor shortage that is expected to exist for some time. Before the COVID-19 outbreak, the number of annual accounting graduates (at both the bachelor’s and master’s levels) was trending downward, according to the AICPA – and that was before the onset of the “Great Resignation.” Today, 97 percent of North America-based executives are worried about a potential shortage of qualified workers over the next 10 years. In addition, 83 percent of global executives identify retention and turnover as a top concern today, according to a 2022 survey by Protiviti-Oxford. 

Accounting and tax expertise are in short supply. We need innovative ways to address this challenge, such as getting advanced tax automation in place. 

Disclaimer

Please remember that the Vertex blog provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information. The views and opinions expressed in the Vertex blog are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.

Blog Author

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Vice President of Tax Content and Chief Tax Officer

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.