The AICPA’s (American Institute of CPAs) Advocacy program states that as many as 24 states “anticipate that their 2013 legislature will consider a proposal to tax accounting services.”
Let me start by saying I am not a CPA, nor do I prepare income tax returns for businesses or individuals. However, in my practice, we do payroll and sales tax returns. If laws are passed taxing the accounting services, I don’t know if this would affect my clients or not. However, I would guess that our services would be included in “accounting” for a couple of reasons.
The first reason is that in order to do the tax return, you must have accurate figures to give to the CPA. This requires that proper bookkeeping is completed. The second reason I feel our services would be included is that many CPA offices also do the bookkeeping for their clients. I’m sure the government will look for any way to increase its tax revenue in this area, and lumping bookkeeping and tax preparation together would make sense to them.
I feel this would be an unfair burden on our clients. The reason they need a CPA to prepare the return is to know how much tax they owe to the government. Taxing this service is basically charging tax on top of the tax that will be paid on the income of the business. Professional services are generally not subject to tax, so I hope they decide this service should not be included in sales tax due. If laws are passed making these services taxable, it will of course add to the burden of the accounting professional to have to collect and remit this tax as well. We are already busy with compliance issues for our clients. I hope this won’t be added to our plates on top of everything else we do.
Let me know what you think about this issue.
Candy
