Licensure under fire in the states

A powerful narrative is taking shape across the country that could define the future of licensure. State legislators are coming together to challenge the necessity and value of occupational licensing.

So far, there have been no direct challenges to whether CPAs should be licensed. However, there’s a national anti-licensure legislative strategy that does not distinguish between occupations and learned professions such as CPAs.

The changing legislative environment means we risk losing licensure as a means to protect the public. That would mean no licensed architects, no licensed engineers and no licensed CPAs. We’ve spent decades ensuring that only qualified and educated professionals can hold out as CPAs. Clients trust CPAs to act as their fiduciaries because they know the profession is well regulated.

There is resistance to the expansion of occupational licensing across the political spectrum. In the 1950s, 5% of workers in the United States required a license, whereas 30% required a license in 2015. The increase leads to a lot of questions about whether licenses are truly protecting the public or whether they are stifling competition. While state legislatures are not looking directly at learned professions — like the CPA — all occupations and professions are getting swept into the legislation.

But if licensing has increased since the 1950s, why is the conversation changing so much now? In 2015, the U.S. Supreme Court ruled in FTC v. North Carolina Dental Board that the North Carolina State Board of Dental Examiners was not entitled to immunity from antitrust laws when it tried to prevent non-dentists from offering teeth whitening services. The case did not address occupational licensing directly, but it provided an opportunity for anti-licensure voices to enter the national conversation.

From 2015 to 2018, 34 states introduced legislation related to occupational licensing reform. On both coasts and in every region, state policymakers are seriously considering these reforms. For example, New Mexico Governor Susana Martinez signed an executive order that would allow people to perform services normally restricted to licensed professions, including CPA services, if they had the customer sign a waiver.

This national conversation around licensure threatens our mobility laws and could eliminate substantial equivalency. If this legislation succeeds, requirements for licensure will vary wildly across states, creating costly compliance burdens for CPAs.

This issue will continue into 2019 state legislative sessions. The AICPA is working with the National Association of State Boards of Accountancy, state CPA societies and state boards of accountancy to educate state policymakers on how smart, uniform and predictable regulation protects the public and promotes economic growth. Reach out to your state CPA society to learn more and get involved.

You can read more about this topic here and listen to this podcast to hear a state CPA society’s first-hand account of fighting this kind of legislation.

Skip Braziel, Vice President, State Regulatory and Legislative Affairs, American Institute of Certified Public Accountants

Licensure under fire in the states

Related Stories