Municipal Attest Engagement Feedback

A couple weeks ago, I shared that the Alabama Department of Examiners of Public Accounts had begun communicating with municipalities their intention to enforce Act 2022-345, requiring all municipalities to be subject to some level of financial accountability. As a service to our members and stakeholders (including the Examiners and the Alabama League of Municipalities), we are compiling a list of firms willing to help bring municipalities into compliance.

 

To accomplish this, we are asking for assistance from firm audit/assurance leads. If you are in public accounting, have experience with municipal attest services and are willing to take on new clients, please see the following link and fill out a 4-minute questionnaire.

 

Municipal Audit / Attest Engagement Interest Inventory – Fill out form

 

Good Boards Caught in the Bathwater

HB220 by Rep. Chris Pringle and Speaker Nathaniel Ledbetter (HB220-eng.pdf) would authorize leaders (Governor, Lt. Gov, Speaker, President Pro-Tem, Minority leaders) to remove and replace any board member they have appointed at any time and without cause. This bill gives us long-term concern for our Board of Public Accountancy.

 

With Speaker Ledbetter’s backing, there is significant momentum for this bill based on how some boards have (and have NOT) done their jobs. In their defense, there are members of various boards who should be replaced… but not on our board. Ours has faithfully performed its duties for the last 106 years. This past Wednesday, I spoke at a public hearing on the bill during the Senate’s FRED Committee meeting, asking them not to “lump (the CPA Board) in with the bathwater.” The bill received a favorable report, despite my comments.

 

To be clear, our CPA Board is not under attack today. Our concern is focused on the long-term. The members our governing Board should always feel free to serve in their full capacity without fear of changing political winds.

 

Should Sales Tax Calculations Include Credit Card Transaction Fees?

Of course not, but some are arguing that it should. Senator Arthur Orr has introduced SB221

(SB221-int.pdf) to specifically address this question in statute.

 

Some businesses charge a convenience fee as a way of recouping credit card procession fees. This is more prevalent for small businesses. Without clear guidance, nothing prevents the Department of Revenue from including those fees as taxable income.

 

Taxing authorities don’t want to lose whatever small amount of revenue they collect from those services, but they are, in fact, services. Furthermore, I don’t know how a store that sells groceries and/or other tax-reduced-or-exempt items would be able to apply a weighted average of sales taxes to the convenience fee.

And now, quick updates:

1. HB250 (Garrett) and its companion bill SB79 (Roberts), intended to clear the way for Trump accounts in Alabama and to provide an indefinite extension to a provision allowing employers to pay employee student loans as a tax-free benefit, have passed their respective committees.
2. HB480 (England) is the latest attempt to reshuffle the SSUT distributions. The bill calls for a reduction of the distribution to the State’s general fund and education trust fund, as well as a reduction in the distribution to the counties. The increase would all go to municipalities (by population). There would also be a new requirement that counties and municipalities share their SSUT revenue (a minimum of 40%) with their local school boards.
3. The Watchlist on our Advocacy web page is being constantly updated. Check in often.

CLICK HERE FOR THE WATCHLIST

There have been 807 bills filed so far. If we’ve missed something or you have any questions, please do not hesitate to contact me at rpearson@alabama.cpa.