From Accountancy Act Revisions to Capital Gains Tax: The Latest Developments in the 2024 Legislative Session

by Mike Nelson

The 2024 Washington State legislative session started on January 8 and is off to a fast start. This year is a “short session,” which is 60 days long and is scheduled to end on March 7. Typically, short sessions, held during even numbered years, focus on non-budget related issues. 

While legislators are discussing many significant issues  which do not directly affect the CPA profession, there are still several bills we are tracking and working on.  

Accountancy Act Updates 

The WSCPA has been working on a package of changes to the Accountancy Act for the last few years. These changes are combined within HB 1920 and SB 5887. The regulatory framework for the CPA profession is modeled after the Uniform Accountancy Act (UAA) and in Washington we last adopted the UAA broadly in 2001, when we adopted the framework that has led to individual license mobility. Since 2001 there have been many minor changes made to the UAA and passage of this legislation would adopt many of them into our laws. This bill also would move the experience requirement for initial licensure to the Washington Board of Accountancy (WBOA) and would give them the ability to determine if an individual from another state has substantially equivalent requirements for mobility and practice privileges in Washington. These changes would give WBOA added flexibility to maintain mobility and potentially address changes in the future if alternative pathways to licensure would be adopted on a national level. The WBOA currently has the power to adjust the examination and education requirements for initial licensure, so moving the experience requirements to under their Board rules would be consistent with the other aspects of licensure. 

Financial Education  

Another issue that has come up that we are actively supporting is financial education requirements for high school graduation (HB 1915 and SB 5819). The WSCPA was involved in the initial creation of the Financial Education Public Private Partnership that helped adopt financial education standards for the state’s K-12 education system. In recent years, a requirement that schools offer at least one class that meets these standards was adopted. This new legislation would require that a student take at least one class that meets these standards. This requirement could be an additional elective class, like accounting or financial math, or integrated into existing classes like math or others. Broader financial literacy has long been seen as a benefit to the profession generally, and we continue to support these types of changes that would help expand access and adoption of these curriculums.  

Capital Gains Tax 

Capital gains taxes are again being discussed in the legislature. The Department of Revenue (DOR) proposed and introduced legislation (HB 2278 and SB 6248) that would make a number of changes to the capital gains tax. We worked with DOR on a number of these changes and believe they adequately address some of the issues that WSCPA members have been experiencing when completing these tax forms. An initiative has been submitted by voters in the state to the legislature that would repeal the tax in its entirety. Once an initiative is certified, the legislature can adopt the initiative, adopt an alternative proposal which would send both the alternative and the original initiative to the November ballot, or take no action on the initiative which would send the initiative only to the November ballot. A change to the capital gains tax could be seen as an alternative to the initiative and could appear as that alternative on the ballot. This has decreased the likelihood that DOR’s proposed bill will pass during this session.  

There are also a number of proposed changes to general human resource and licensure requirements that we are monitoring for their potential impact to public accounting firms and the WBOA’s licensing powers. 

If you have any questions on the above bills or other legislation, please feel free to contact me.