HF4911

Purpose

• The bill changes how CPAs and CPA firms can operate in Minnesota. It creates new rules for permits, interstate mobility, and practice privileges to allow more out-of-state CPAs to work in Minnesota while also strengthening oversight of firms that operate there.

Main Provisions

• Permits for CPA firms (326A.05)

  • The state board must grant or renew permits for firms to practice as CPA firms.
  • Firms that must hold a Minnesota permit:
  • Firms with an office in Minnesota that perform attest services.
  • Firms with an office in Minnesota that perform compilation services.
  • Firms that use the title “CPA” or “CPA firm,” or firms without a Minnesota office that perform attest services for a Minnesota headquarters client.
  • Out-of-state firms may perform certain services and use the CPA title without a Minnesota permit only if they meet interstate mobility rules (see Practice Privileges below) and/or other specific conditions.

• Interstate mobility and permit exceptions for firms

  • A firm with a valid permit from another state (which has no Minnesota office) may perform certain services for a Minnesota-headquartered client and may use the CPA title without a Minnesota permit if it meets interstate mobility qualifications (including related peer-review requirements) and uses a Minnesota-authorized arrangement through a person with practice privileges in Minnesota.

• Corrective actions for firms (discipline)

  • If a firm falls out of compliance due to changes in ownership or personnel, it must take corrective action promptly.
  • If the firm does not return to compliance within a reasonable period defined by board rules, its permit or practice privileges can be suspended or revoked.

• Practice privileges for individuals not primarily based in Minnesota (326A.14)

  • A person whose principal place of business is not in Minnesota may be treated as substantially equivalent to Minnesota licensees if they hold a valid out-of-state CPA certificate/license/permit in good standing as of December 31, 2024, have a bachelor’s degree in accounting (or equivalent), and have passed the Uniform CPA Examination.
  • These individuals may be granted Minnesota practice privileges without obtaining a Minnesota license, but they are subject to Minnesota rules and the board’s discipline.
  • The licensee and the firm employing them consent to Minnesota board jurisdiction and to service of process in Minnesota, and must stop offering professional services in Minnesota if their out-of-state license is no longer valid or in good standing.
  • An individual with practice privileges who performs attest services for a Minnesota headquarters client may do so only through a firm that either has a Minnesota permit or holds Minnesota practice privileges.
  • Individuals granted practice privileges have all the privileges of Minnesota licensees, provided their principal place of business remains outside Minnesota and their out-of-state credentials are considered substantially equivalent as of 2024 and still in effect as of 2024.

• Additional guidance on practice privileges

  • Notwithstanding other rules, individuals offering or rendering professional services under these privileges must comply with the board’s requirements, and may be subject to the board without the need to provide extra notice or submission.
  • An individual with practice privileges who performs services in Minnesota must comply with the jurisdiction and disciplinary authority of the Minnesota board and may be subject to its rules.

What the bill seeks to accomplish

• Expand the ability of Minnesota-based clients to access CPA services from qualified out-of-state CPAs.
• Create a clear framework for when out-of-state firms and individuals can provide CPA services in Minnesota without permanently relocating or obtaining a Minnesota license.
• Strengthen oversight and accountability for CPA firms operating in Minnesota through corrective-action provisions.
• Align Minnesota’s mobility rules with stated qualifications (education, exam, and good standing) for out-of-state practitioners to ensure consistent standards.

Significant changes to existing law

• Introduces formal practice privileges for individuals whose principal place of business is outside Minnesota, allowing them to practice in Minnesota without a Minnesota license if they meet specific out-of-state criteria.
• Clarifies and broadens when out-of-state CPA firms can perform services in Minnesota and use the CPA title without a Minnesota permit, subject to mobility standards and peer-review requirements.
• Adds corrective-action language that tightens consequences (suspension or revocation) for firms that fall out of compliance after obtaining a permit.
• Raises emphasis on documenting and enforcing compliance with board rules when out-of-state practitioners operate in Minnesota.

Relevant Terms

• CPA, CPA firm, certified public accountant
• Attest services, compilation services
• Permit, practice privilege, interstate mobility
• Minnesota board (disciplinary authority)
• Peer review, good standing
• Principal place of business, office in Minnesota
• Headquarters client (Minnesota HQ)
• Uniform CPA Examination
• Substantial equivalence
• Corrective actions, suspension, revocation
• Jurisdiction, service of process
• In-state vs out-of-state practice

Relevant Terms - CPA, CPA firm - Attest services, compilation services - Permit, practice privileges - Interstate mobility, peer review - Minnesota board - Principal place of business - Uniform CPA Examination - Substantial equivalence - Corrective action, suspension, revocation - Good standing - Headquarters (HQ) in Minnesota