COCPA NewsAccount - 2015 - November/December

NewsAccount November/December 2015 Colorado Society of CPAs

Preparing for the Future of the Profession PAGE 4 "Someone's sitting in the shade today because someone planted a tree a long time ago." –WARREN BUFFETT

Contents Features

Holiday Hours The COCPA office will be closed for the holidays: Nov. 26-27 Dec. 25 Jan. 1 For information 24/7/365, visit www.cocpa.org.

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Equal Tax Treatment for Same-Sex Couples

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Say What? Making Sure You're Understood

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Colorado's Manufacturing Industry

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Accounting Hiring in High Gear

Sept/Oct 2015 NewsAccount The City and County of Denver collected $20.1M from the sale of medical marijuana from July 2011 to April 2015, not $16M as stated in the article. Also, it collected $10.8M through the sale of recreational marijuana from July 1, 2014 up to April 2015, not $21.5M as stated.

We apologize for the errors and thank Steven L. Ellington, CPA, and City and County of Denver Treasurer, for providing the correct figures.

The AICPA and CIMA are exploring a proposal to integrate operations, strategy, and management.

Time to Renew Your Colorado License

CORRECTION "The Colorado Tax Environment for Legal Marijuana"

AICPA Proposes Expanded CIMA Relationship

Whether you’re active, inactive, or retired, you must renew your license by Nov. 30, 2015, to remain in good standing.

The U.S. Supreme Court decision in Obergefell v. Hodges creates tax issues which require close attention this coming filing season.

Digital communication can be tricky, depending on your message, your audience, and your objective.

Think craft breweries, organic food, aerospace, and outdoor apparel. They’re all helping Colorado manufacturing to grow in new ways.

The AICPA’s 2015 Trends report on supply and demand for accounting graduates is out, and the results support what’s happening here in Colorado.

Departments

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Chair Column Movers & Shakers Classifieds Nov/Dec 2015 • www.cocpa.org •

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Chair Column

NewsAccount A bi-monthly publication of the Colorado Society of Certified Public Accountants Vol. 61, No. 4 November | December 2015 Board of Directors Steven R. Corder Chair Mark T. Solomon, Vice Chair Tawnya R. Ramirez, Treasurer Sheila M. Balzer , Immediate Past Chair Mary E. Medley, Secretary Directors Victor A. Amaya, Craig A. Arfsten, Christine Benero, Kelly G. Boggs, Ann E. Hinkins, Dan W. Soukup Editorial Board Jack Allgood, Alan D. Bennett, Kay R. Dragon, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, R. Stephen Van Meter, Michael D. West Mary E. Medley, President/CEO Natalie G. Rooney, Contributing Writer NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7887 E. Belleview Ave., Suite 200, Englewood, CO 80111. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. The Colorado Society of CPAs assumes no liability for readers’ business decisions in reference to advertisements or other information included in this publication.

Membership dues include a $9.90 one-year subscription to NewsAccount. Periodical postage paid in Englewood, CO, and additional mailing offices.

POSTMASTER: Send address changes to NewsAccount, Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111 Net press run = 8,550 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 8,450; free distribution by mail = 50; free distribution outside the mail = 0; total free distribution = 50; total distribution = 8,500; office use, leftovers, spoiled = 350; returns from news agents = 0; total sum = 8,850; percent paid and/or requested circulation = 99%.

303-773-2877 • 800-523-9082 Fax: 303-773-6344 • cpa-staff@cocpa.org

NewsAccount is available online at www.cocpa.org.

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• NewsAccount • Nov/Dec 2015

The Future, Reimagined.

BY STEVE R. CORDER, CPA, CGMA

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n Sept. 16, I attended a special AICPA regional Council meeting in Denver where attendees were introduced to and discussed an idea: evolving the present joint venture between the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA), partners in creating the Chartered Global Management Accountant (CGMA) designation, into a new association while maintaining both current membership bodies.

In the coming months, you’ll hear more about this initiative. In March 2016, the AICPA Council will consider whether to proceed with a membership vote authorizing the creation of the new association. If approved by both the AICPA and CIMA memberships, the effort would create an organization representing approximately 600,000 members worldwide.

There’s no doubt this proposal is a huge deal. And, as with many of the changes the AICPA and our profession have faced over the years, there will be debate and spirited discussion. That’s how change and forward movement happen. It’s how we get stronger.

I don’t need to tell you, but I’m repeating it anyway because it’s so easy to get stuck in the comfort zone. We live in a changing world. Our profession is changing rapidly. Some of the trends we see right now present opportunities.

In the U.S., one out of every three accounting grads goes on to become a CPA. That statistic used to be one out of two. If you project the statistics out, the numbers don’t look promising. We see moderate growth – there’s been an eight percent increase in the number of CPAs over the past six years. But more and more people aren’t obtaining the CPA

credential. And, we’ve seen a 30 percent increase in the number of accounting grads not becoming CPAs in the past six years.

Instead, they’re having successful careers in industry without becoming CPAs. Currently, only 13 percent of all accountants are in the U.S. Over the next 15 years, that number will drop to 10 percent. By comparison, 20 percent of all accountants are found in Asia Pacific countries. That number will jump to around 55 percent over the same 15 years.

Meanwhile, the profession is exploding in Africa. Many U.S. firms are setting up operations there, and many European firms already are in business on the African continent. It’s no surprise that other accounting associations are competing fiercely to build their credentials in those emerging markets.

The bottom line: U.S. influence over the global accounting profession is going to decrease over time as we represent fewer members of it relative to the rest of the world. CIMA, a leader in management accounting for almost 100 years, already is recognized internationally. This is why the AICPA, CIMA, and the CGMA designation make sense.

Employers tell us the CGMA credential is important. And, industry professionals want a credential that is relevant in their area of work – but it’s not always the CPA. If we want to continue to foster a CPA-led accounting profession, we need to recognize that promoting the CPA and CGMA and expanding our international reach are important. We should be a voice for both CPAs and CGMAs on an international basis going forward. Let’s bring these highly qualified professionals into the AICPA fold and hold them to the highest professional standards and code of conduct. That’s best for everyone.

You need to know four key points. If the joint venture evolves to allow the AICPA and CIMA to integrate management, resources, and strategy, and create a new global accounting body, together the organizations will: • Create the most influential body for professional accountants worldwide, building on the strengths of the AICPA and CIMA to advocate on behalf of the accounting profession.

• Promote the most recognized and respected accounting credentials that enable members to build careers at the forefront of market demand.

• Accelerate development and delivery of relevant resources.

Everyday Heroes and Heroines

• Innovate and collaborate to make the accounting profession indispensable.

CPAs want to remain relevant. To do that, we need to maintain and build upon our credential, focused on our core competencies.

We also need to recognize that two-thirds of accounting grads are entering the business world versus public accounting, and they may want to be top professionals without the CPA credential. The CGMA credential is where they’re headed.

I want to stress that the core priorities of the CPA credential don’t change in this joint venture. We’re always going to protect the brand and serve you. The American Institute of CPAs will continue to exist and promote the CPA nationally and abroad. New initiatives already are in the works to strengthen the CPA pipeline and enhance audit quality.

Kevin A. Gile, CPA

Anton Collins Mitchell LLP

Patricia Ridge, CPA Soukup Bush & Associates, CPAs, P.C.

Is this discussion about the new joint venture going to cause consternation? Absolutely. Is this process going to be easy?

Absolutely not. But the end result is going to be a stronger, more viable profession and professional association for the long term.

I think back to 20 years ago when the great debate was about whether or not non-CPAs could be owners in a CPA firm. Many believed allowing non-CPA ownership would bring about the end of the world. What happened? Most CPA firms have been incredibly financially successful over the last two decades, and loosening that constraint opened up many opportunities for new partners who brought so much to the profession, even though they didn’t have the CPA credential.

San Luis Valley - Alamosa

Marilynne B. Tarrall, CPA

Julia A. Taylor, CPA KPMG LLP

New West Advisors

Sponsored by

No doubt change can be painful and scary. However, my prediction is that we’ll look back in 20 years and say, “Of course that made sense.” s Email your comments and questions to Steve Corder at scorder@ kcedenver.com.

Nov/Dec 2015 • www.cocpa.org •

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Strategic Initiative

AICPA Proposes Expanded CIMA Relationship "Someone's sitting in the shade today because someone planted a tree a long time ago." –Warren Buffett In response to the needs of members working in corporations of all ownership structures and sizes, the AICPA formed a joint venture in 2011 with the Chartered Institute of Management Accountants (CIMA), the world’s leading and largest professional body of management accountants. In January 2012, the two organizations launched the Chartered Global Management Accountant (CGMA) designation. The number of CGMA designation holders is now more than 150,000 worldwide, with over 50,000 in the U.S. Now, the AICPA and CIMA are beginning a conversation with their respective members about a proposal to integrate their operations, strategy, and management through a newly formed association. The AICPA would continue to serve members and protect, promote, and grow the CPA profession. The new association aims to maximize efficiencies and provide a broader platform for further enhancing advocacy, promoting public and management accounting on campuses and with employers and clients, and developing new research and educational offerings.

According to Arleen Thomas, CPA, CGMA, AICPA Senior Vice President-

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Management Accounting and Global Markets, “The proposal would enable the profession to achieve even greater influence domestically and internationally and broaden the appeal of accounting to the next generation of professionals.”

COMMITMENT TO THE CPA “Our strategy is built on the power of ‘And,’” says Barry C. Melancon, CPA, CGMA, AICPA President and CEO. “The AICPA would continue to maintain an unwavering commitment to the CPA, promote high standards for ethics and quality, and protect the public interest and the core values of the CPA profession. What we would gain through this new association with CIMA is the further professionalization of management accounting. Financial reporting is stronger when we drive quality in both public and management accounting.”

TRENDS DRIVING NEED FOR EVOLUTION The CPA profession has a history of anticipating – and adjusting to – changes in market demands. It has developed solutions to address increasingly complex technology, specialization, and evolving business structures. These drove such evolutionary

steps as the computerization of the CPA Exam, non-CPA firm ownership, and the adoption of cloud computing solutions.

With record membership numbers and the CPA reputation at the highest level, the AICPA believes the time is right to pursue a proposal that will better enable the profession to tackle such factors as: • The growing worldwide talent shortage and associated demand for ever higher levels of specialized knowledge and services • Significant demographic and generational shifts • The increasing number of accounting graduates bypassing professional affiliation and the associated commitment to a professional code of conduct • The shift of economic growth toward Asian and emerging markets • The greater international mindset of today’s graduates and the overall trend toward more international connectedness and interdependencies • Regulatory impact coming from Europe and other parts of the world that are affecting businesses in the U.S.

• The need for finance professionals, facing an increasingly competitive job market, to differentiate themselves from their peers and demonstrate greater strategic management and business partnering skills

organizations launched the AICPA | CIMA Competency and Learning platform. The tool also analyzes public accounting skills, such as those related to assurance as well as employee benefit plan and governmental audits.

BUILDING ON SUCCESS Approximately 50 percent of most state CPA society and AICPA members work in businesses of all sizes and ownership structures. Creating the CGMA offered these professionals a complementary designation and enhanced resources.

Since the designation’s launch, the AICPA and CIMA have delivered nearly 120 reports and tools plus online events and career development resources to members seeking to increase their knowledge and hone critical skills for the future. The organizations also developed the CGMA Competency Framework and the Global Management Accounting Principles. In addition, so that members and employers could better assess and address accountants’ skills and competency gaps, the

CGMA designation holders also have access to the CGMA Magazine, the CGMA Finance Impact Tool, numerous reports and case studies on best practices, and the Harvard ManageMentor online learning and performance support resource program. The website cgma.org is the hub for all of these resources and more.

BENEFITS OF THE PROPOSAL Strengthening the bond between the two organizations would streamline resources and create efficiencies to help both organizations move faster to market and produce content with broader perspective, especially on international business issues, which are increasingly impacting CPA firm clients. In particular, the AICPA cites the gains in advocacy that

could be realized when speaking on behalf of more than 600,000 current and next generation accounting professionals. The association of the AICPA and CIMA would form the most influential body for the accounting profession, within the U.S. and globally, advocating on tax, audit, financial reporting, and other issues important to members.

WHAT’S NEXT? Gaining member insights into the AICPA and CIMA evolution is critical to helping the Institute’s governing Council determine its next course of action.

Council will assess member feedback and consider authorizing a member ballot in spring 2016. Moving forward would require a vote by AICPA members, with a majority of those voting to support the proposal. CIMA has a similar requirement and timeline.

Visit aicpa.org/horizons to find out more and provide feedback on the proposal.

Help Colorado Accounting Students.

Donate to provide scholarship support.

You can give "now" – but schedule your donation for December 8th.

The Colorado Gives Day website allows you to schedule your donation for Colorado Gives Day on December 8th. This is the best way to give to take advantage of all available matching and incentive opportunities.

The Educational Foundation of the COCPA does great work providing scholarship support to accounting students at Colorado colleges and universities. For many students, a scholarship makes the difference in being able to pursue a career as a CPA. Last year, the Foundation provided scholarships to 52% of our applicants.

That means we had to turn away 48% of the students who were requesting assistance.

The Foundation is committed to improving the talent pipeline for our profession, and that starts with our focus on students' educational opportunities.

Visit www.ColoradoGives.org and select Educational Foundation of the Colorado Society of CPAs to donate

Nov/Dec 2015 • www.cocpa.org •

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Management Accounting

The CGMA Designation at Work

BY NATALIE ROONEY

In January 2012, the AICPA began issuing the Chartered Global Management Accountant (CGMA) credential, a professional management accounting designation, with the mission to promote the science of management accounting on the global stage and champion management accountants and the value they add to organizations. Here's how one Colorado CPA is using his CGMA designation to make his organization more efficient and effective and maximize service to his customers.

Rich Robirds, CPA, CGMA, has been a COCPA member for more than 10 years.

And he knows a good thing when he sees it. As senior vice president and CFO at Equitable Savings & Loan in Sterling, which has nine branches in Northeast Colorado and one in Fort Collins, he oversees many areas: money management, investments, finance, IT, and compliance, just to name a few. As many CPAs who are based in the state’s smaller, more rural locations can attest, having the right resources on hand when you need them is critical.

Robirds learned about the CGMA designation when it was in the initial discussion phases. As soon as it was introduced in 2012, he jumped at the opportunity. “I had just moved from public accounting into management accounting and had recently completed the management time required to be grandfathered into the designation,” Robirds says.

He finds he uses the resources that come with the designation daily. “The CGMA has developed a competency framework that is a blueprint to analyze your finance and accounting operations to help you be more efficient and effective,” he explains.

In addition to the many resources on the CGMA.org website, Robirds says the AICPA produces e-mail communications to foster ongoing discussions about different facets of management accounting,

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including the successes organizations around the world have had with implementing different types of budgeting and accounting and managing different functions such as IT and operations. “We receive weekly updates on what the AICPA and CIMA (the Chartered Institute of Management Accountants, the AICPA’s joint venture partner) are putting together as guidance, tools, and training,” he adds.

“The resources provide takeaways, such as key performance indicators, to implement and make your own operation leaner and more cost effective. The information ranges from the very basic to more complex.”

Thanks to a strategic partnership, CGMA designation holders also have access to online resources and training through Harvard Business School, including cash management, personnel, and time management. Robirds says when he needs information on a particular topic, he goes online and uses the courses. “The material offers pointers on different aspects of your job that you can use to make you and your team more productive,” he says. “You take management training in college and get some real-world experience, but this offers specific, detailed guidance on different areas of your operation so you can find out what’s driving your busines, and discover what you need to look at, other than the numbers, that are crucial to managing costs.”

Robirds also cites the white papers, available on the website, as excellent resources on topics such as risk management and working with a board of directors. “There is a wealth of resources that comes with the CGMA designation,” he says.

The AICPA offers many reasons why CPAs should pursue the CGMA designation, but Robirds breaks it down to a simple imperative: “If you want to be relevant in the market as a management accountant, there’s no way you can do without it,” he says. He adds that at his smaller organization, the CGMA provides him with resources to which he wouldn’t normally have access. From different factors impacting the economy to operations to technology, “the resources have helped me ensure we’re doing things correctly.”

Robirds says he has found the designation an amazing resource for management accountants. “This really gives us competency that is invaluable in the marketplace.

People think I’m a genius when I use information I’ve pulled from the website. As a profession, it ensures we have the tools to provide our services to our customer base.”s To obtain the CGMA designation through the AICPA, CPAs must pass the CGMA exam, meet the experience requirements, and be a member of AICPA. Learn more about the CGMA designation at www.cgma.org.

Regulation

Time to Renew Your Colorado License If you possess an Active, Inactive, or Retired status Colorado CPA certificate, you must renew it, online, by Nov. 30, 2015, to remain in good standing – and without paying additional fees for late renewal.

Go to www.colorado.gov/pacific/dora/Accountancy, and click on RENEW A LICENSE to begin the process. If you renew during the grace period, Dec. 1, 2015 – Jan. 31, 2016, your renewal fee will include a late charge. After Jan. 31, 2016, your certificate will expire, and you must file a reinstatement application if you wish to continue practicing. Should you indicate that you have been using the CPA designation or performing work that requires a license, you may be subject to disciplinary action.

All new Colorado CPA certificate holders must renew by Nov. 30, 2015, as well unless you are issued a license within 120 days of the renewal date – between Aug. 3, 2015, and Nov. 30, 2015. Your license will be issued with the next expiration date, Nov. 30, 2017.

PEER REVIEW ATTESTATION If you are subject to the Peer Review requirement because you provide compilation, review, and/or audit services, you are required to attest that you have complied with those requirements when renewing your license in Active status. You’re exempt from the requirements if you do not provide such services, work for a CPA firm already subject to the peer review requirements, or are renewing an Inactive or Retired status license.

STATUS CHANGES To change your status (Active, Inactive, Retired) to a different status, you should do so before renewing your license. To download the appropriate form and instructions, go to www.colorado.gov/ pacific/dora/Accountancy_CPA_Applications_Docs. Note that changing your status during the renewal period will delay your license

renewal because first you must complete and mail the change status form for processing. Once the status change has been processed, you must renew your license online in the new status no later than Jan. 31, 2016, to avoid license expiration.

To change from Active to Inactive status, download the “Change Status to Inactive” form from the Colorado State Board of Accountancy website, complete it, and mail it to the Colorado Division of Professions and Occupations, Office of Licensing, 1560 Broadway, Ste 1350, Denver, CO 80202. No fee is required.

To reactivate from Inactive or Retired status, download the “Reactivate Inactive or Retired License” form from the website, and follow the completion and mailing instructions. Note that this change requires payment of a $90 fee. You also must submit documentation of the required CPE. To change to Retired status, download the “Change Status to Retired” form, and follow the instructions. This change requires payment of a $20 fee and submission of documentation of completed CPE. You must have completed 10 hours of CPE for every quarter in the reporting period up to filing the change status request.

TRACKING APPLICATION STATUS Go to www.dora.colorado.gov/professions/onlineservices to track your application from the date it is logged into the database to the date it has been approved. The Office of Licensing recommends allowing at least 10 business days from date of mailing before checking the status of your application. s Questions? Contact COCPA CPE Director Rebecca Campbell, CAE, rcampbell@cocpa.org, 303-741-8618, or 800-523-9082, ext.

118, or CEO Mary E. Medley, mmedley@cocpa.org, 303-7418601, or 800-523-9082, ext. 101.

It's Time to Renew Your

CPA CERTIFICATE Everything you need to understand the new process for renewing your license.

license.cocpa.org Nov/Dec 2015 • www.cocpa.org •

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Regulatory Update

ACA Update: New Requirements for 2016

BY NATALIE ROONEY

As of Jan. 1, 2016, new Affordable Care Act requirements come into play. Learn how your business, and your clients, may be affected.

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mployers with between 50 and 100 employees have had a reprieve from some provisions of the Affordable Care Act (ACA) since it became law, but that all comes to an end on Jan. 1, 2016.

The ACA requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage to report information on this coverage to the IRS and to covered individuals. Large employers (generally those with 50 or more fulltime employees) also are required to report information to the IRS and to their employees about their compliance with the employer shared responsibility ("pay or play") provisions and the health care coverage they have offered.

Jim Marsh, president of HofgardBenefits, says these requirements, which will be reported using Form 1095-A, Health Insurance Marketplace Statement, may cause some initial angst but will eventually be similar to W2 employee income reporting requirements. “Once people understand what to do, it will be a simplified function,” he says. “It’s just overwhelming now because it’s brand new.”

Form 1095 asks for both high level employer information and individual employee information: • What kind of employer are you, and did you offer affordable coverage?

• Who are your employees to whom you offered coverage, how long did they have coverage, and what did you pay (minimum cost)?

Larger employers with over 50 fulltime employees are required to complete

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Form 1095. Marsh says if you have a fully insured health plan, in most cases, the health insurance companies will file Form 1095 for you. It would be wise to confirm with your insurance carrier that it will file this form on your behalf.

If you have a partially funded or selffunded health plan, you will have to file Form 1095 yourself. “It is your responsibility to make sure it’s filed,” Marsh emphasizes.

Form 1095 covers the 2015 employee count year. If in hard copy, the form must be filed no later than Feb. 29, 2016. The date is March 31, 2016, if you file electronically.

A Q&A is available on the IRS website at www.irs.gov/Affordable-Care-Act/ Employers/Questions-and-Answerson-Employer-Shared-ResponsibilityProvisions-Under-the-Affordable-CareAct. ENSURING COMPLIANCE The new piece for 2016 looks back to 2015. “It’s a hot issue because it’s the first time employers have had to do this,” Marsh says. When it comes to 2015, companies should evaluate to make sure they’re in compliance with the new law by taking the following steps and answering these questions: • Do you have a grandfathered health plan? If not, beginning on Jan. 1, 2016, all plans must be ACA compliant.

This includes having minimum essential health coverage, which is a plan designed to cover certain features that comply with the ACA. “Make sure you’re either grandfathered or compliant going forward,” Marsh says.

• Ensure your health plan documents comply with the ACA requirements.

For example, one requirement is that a new hire cannot be assessed a waiting period of more than 90 days. Also be sure the plan you have will allow

new enrollees to enroll without any preexisting conditions or exclusions.

• If you offer a health HRA or FSA, be certain there’s an underlying health insurance plan available to your employees. If your HRA or FSA has been documented prior to Dec. 31, 2014, make sure it has been updated.

• Employers must continue to provide notices to new employees regarding the availability of a health exchange should they terminate employment. Colorado’s exchange is Connect for Health Colorado. Employers must also have a Summary of Benefits and Coverage Statement available to employees.

Providing it via the company intranet is permitted.

• Double check that all information is correct.

Remember: Know your status – are you a large employer? Determine your pay or play responsibility. If you have more than 50 fulltime employees, then beginning Jan. 1, 2016, you are required to offer health coverage or pay the penalty tax which is $2,000 per employee, per year. The penalty is not tax deductible.

Go to www.irs.gov/Affordable-Care-Act/ Employers/Questions-and-Answers-onReporting-of-Offers-of-Health-InsuranceCoverage-by-Employers-Section-6056 for more information.

“CPAs and their clients need to know what kind of employer they are,” Marsh emphasizes. “If they’re not going to offer health insurance, they need to understand the exposure and penalties. They need to understand Affordable Care Coverage.” s For further guidance, contact your health insurance broker or Jim Marsh, a sponsored affinity partner of the COCPA, at 303-442-1000 x144, or jmarsh@hofgard.com.

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But we think institutional investors shouldn’t be the only ones to benefit from written investment policy statements, transparent portfolio management costs, avoidance of conflicts of interest and a comprehensive investment monitoring process. That’s why, at M.J. Smith and Associates, we treat individuals the same way we treat institutions – with honesty, integrity, objectivity, and a clear, understandable process.

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Individual Taxation

Equal Tax Treatment for Same-sex Couples

BY BRUCE M. NELSON, MA, CPA

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t is rare to see simplification in tax matters, but that is exactly what the U.S. Supreme Court provided to both same-sex partners and tax practitioners alike in Obergefell v.

Hodges, 135 S.Ct. 2071 (2015). According to Justice Anthony Kennedy, who delivered the majority 5-4 opinion, “the right to marry is a fundamental right inherent in the liberty of the person . . . and . . . same-sex couples may not be deprived of that right and that liberty.

The Court now holds that same-sex couples may exercise the fundamental right to marry.

No longer may this liberty be denied to them.” In short, the Court held in Obergefell that state bans on same-sex married couples were unconstitutional. Thus, from a state tax standpoint, heterosexual and same-sex couples must receive equal treatment under the law.

If this doesn’t sound like simplification, refer to Defense of Marriage Act – Where We Are Now, published in the November/ December 2014 NewsAccount, page 8, for a map and charts illustrating the different filing options available or mandated by states. This process began with President Bill Clinton signing the Defense of Marriage Act (DOMA) in 1996. The U.S. Supreme Court held in 2013 that certain elements of DOMA were unconstitutional in U.S. v.

Windsor, 133 S.Ct. 2675 (2013), which in turn led to additional state-wide litigation and a mishmash of conflicting state rules.

Only a year ago, 24 states banned samesex marriage, and at the time Obergefell was handed down, bans still were in effect in 13 states (Arkansas, Georgia, Kentucky, Louisiana, Michigan, Missouri, Mississippi, Nebraska, North Dakota, Ohio, South Dakota, Tennessee, and Texas). This filing season, taxpayers and practitioners will be confronted with some transitional issues that require close attention.

Same-sex married couples living in states that formerly banned such unions will see the biggest change. According to the U.S. Census Bureau, the change could affect roughly 325,000 households. In the past,

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many of these couples may have elected to file separately or jointly on their federal return while filing as single on their state return. That will not be necessary this year.

All married couples, same-sex or not, will choose to file either jointly or separately on their federal and state returns.

After the Windsor decision, many couples amended their federal returns. Now it would be prudent to consider whether amending state returns is in order. This exercise, depending upon the couple’s circumstances, might result in either additional taxes or a refund. For example, the commonly called “marriage penalty,” the additional tax paid by some married couples that is not due from two single filers with the same income, is now a consideration for all married couples.

The marriage penalty doesn’t exist in states with a flat-rate tax, but in states with progressive tax rates such as California, Iowa, New Jersey, and New York, it may have an impact. Refunds may be available in those states that previously required separate single filing or that required same-sex spouses to pick up as income the employer-provided health-care plan benefits provided by a spouse.

The IRS rules for amending federal returns post-Windsor were quite generous.

Taxpayers could elect to amend or not, and if they did amend, they didn’t have to amend for all open years. Thus, taxpayers could amend for those years where refunds were available and leave untouched those years where amending would increase their tax liabilities. Whether states that have seen their laws overturned by Obergefell will be as accommodating is yet to be seen.

Nevertheless, the right to amend should be legally available. Problems may still exist for certain credits. For example, Mississippi provides an income tax credit for adoption expenses but prohibits adoption by samesex couples. It is unclear how the state will approach such issues.

The federal government doesn’t recognize civil unions or domestic partnerships

as marriages, so couples in such unions may now have to marry to receive equal treatment under the law. Some states, such as Connecticut, Delaware, and New Hampshire, already have converted their civil unions to marriages, but other states have not. Colorado law specifically provides that domestic partners will be treated as spouses for all state purposes including taxes, but Obergefell’s impact on such partners at the federal level remains unclear.

One example is the federal Family Medical Leave Act, which does not protect civil unions or domestic partnerships. As a consequence, both employees and employers should consider carefully their options post-Obergefell. Employers should revisit and update any company handbooks, forms, plans, withholding allowances, dependent and beneficiary designations, leave allowances, and other human resource documents. Now that same-sex marriage is legal everywhere, some employers may move to abandon benefit programs for domestic partners and civil unions.

Another significant change for same-sex couples is the availability of the unlimited marital deduction from state and federal estate taxes and the increase in the applicable exclusion amount from an individual’s $5.43 million (for 2015) to over $10 million for couples. While the Windsor decision made these provisions available at the federal level, claiming them at the state level was complicated, if not impossible, in states that banned same-sex marriage.

In addition, federal law allows married couples to make unlimited gifts to each other and surviving spouses to claim any unused estate tax exemption from the other spouse’s death. States that banned same-sex marriage had also created roadblocks to spousal and survivor social security benefits. Again, while these provisions were clearly allowable at the federal level, the state obstacles that existed to same-sex couples are now gone.

Obergefell also has an impact on community property states – Arizona, California,

Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. For community property states like California, which recognized civil unions or domestic partnerships, the community property rules already are applicable. In the others, the community property rights will begin on the date of marriage.

Common-law marriages are specifically provided for in Alabama, Colorado, Iowa, Kansas, Montana, Rhode Island, South Carolina, Texas, and Utah. Simply put, a common-law marriage is the legal relationship of marriage absent the formal procedures generally associated with such a rela-

tionship. Couples living together in those states, same-sex or not, may want to seek guidance on whether holding themselves out as married requires them to file accordingly.

As for Colorado, despite the ban on same-sex marriage, the Department of Revenue issued an emergency regulation in November 2013 reiterating the Department’s belief that a taxpayer’s filing status for Colorado is determined by filing status on the federal return [Colo.

Code Regs. 39-22-104(1.7)]. In 2014, the Colorado General Assembly changed the statutory definitions, replacing “husband and wife” with “two taxpayers” and “spouse”

with “taxpayer,” to clarify that the filing status for state income tax purposes must be the same as that for federal income tax purposes [Colo. Rev. Stat. §39-22-109(3)]. The Obergefell decision, consequently, will not have an impact on Colorado’s filing status but does have consequences for other areas of the law. s Bruce M. Nelson, MA, CPA, is Director of State and Local Tax at EKS&H LLLP. Contact him at 970-282-5446 or bnelson@ eksh.com.

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WHERE CAN AN AICPA C REDENTIAL TAKE YOUR CAREER NEXT?

Communication

Say What? How to Make Sure Your Message is Really Understood

BY NATALIE ROONEY

Communicating with others is hard enough without taking into consideration all the ways we have to communicate these days. Face-toface, letter, voicemail, e-mail, texting, IM – you’ve got lots of choices. But what’s the best method to make sure you’re really heard and understood? It depends on the message.

O

nce upon a time, when you had a question for or problem with someone at work, you walked to the person’s office/ cube and discussed it – together, face to face.

Or if you were in a different location, you would pick up the phone and call to discuss it.

How often does that happen these days?

Very, very rarely according to a study of 508 workers at the manager level (64 percent), director level (19 percent), and vice president level or higher (17 percent). A whopping 95 percent of those surveyed say they plan to use business communication tools instead of in-person meetings, including email (48 percent), mobile (20 percent), desk phones (ten percent), text messaging (eight percent), and web meetings (eight percent).

This shift to less face-to-face communication comes for a variety of reasons. In an international world of business, the people you’re trying to communicate with may not

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• NewsAccount • Nov/Dec 2015

be in the same building – or even on the same continent. There’s another reason, of course, and it’s right at your fingertips for most of your waking moments: your mobile device. While mobile phones are handy, the convenience of communicating with a quick text or email may be the very thing that causes more mixed messages than ever.

Tara Powers, chief engagement builder at Power Resource Center, says digital communication can be tricky, and depending on what your message is, you may want to steer clear of it, especially with client communication.

“I always try to set client and employee expectations about their preferred method of communication,” Powers explains. “It’s an important conversation to have. If you don’t understand someone’s preference, you’re not setting up the relationship for success. And if you’re in a leadership position, you need to be clear about how the team should communicate. While texting may be the norm, a lot can get misinterpreted in a text.”

Human beings communicate with words, tone of voice, and body language.

According to research, meaning and intention are relayed in the following ways: seven percent through words, 38 percent through

tone, and 55 percent through body language. Powers says when she teaches classes on communication, she will use the same tone to deliver the same message twice, but use really negative body language in one scenario. “People don’t hear the words,” she says. “They tune into my body language.

When you start to rely only on email and texting, you lose ninety-three percent of your ability to ensure that your intention is heard and understood in the correct way.” When you’re face-to-face and can see you’re losing someone, you can redirect – an option not available when you’re texting or emailing.

“When you start to rely only on email and texting, you lose ninetythree percent of your ability to ensure that your intention is heard and understood in the correct way.” ~Tara Powers With instant, impersonal communication, it’s easy to dash off a text or email

without thinking about the consequences.

“We’ve gotten into bad habits, and technology has allowed us to do it,” Powers says.

Humans’ natural tendency is to avoid conflict, and technology offers the perfect, easy solution: Send a text or email instead of going to see someone face-to-face or calling.

Lorrie Blanchard Tietze, founder and manager of Interface Consulting and facilitator of COCPA’s LeadFit program, says she doesn’t mind when clients text her about informal matters, but she has seen firsthand how text conversations are used inappropriately and spiral out of control. “People are sitting three cubes from each other and having a fight over instant messaging,” she says.

“That is inappropriate. Get up, go into the conference room, and have a conversation.

It’s amazing the things people will put into an email or text that they wouldn’t say to someone’s face,” she adds.

Powers says that choosing the wrong communication method ultimately requires far more time, energy, and emotional effort regrouping and fixing what went wrong.

“Now you need an in-person meeting because something blew up via email or text,” she says. “If you’d only picked up the phone in the first place, you wouldn’t be in this situation because you’d know what someone’s body language was saying or if they were frustrated or angry.”

TAKING IT RIGHT

THE

TIME

TO

DO

• effectively, with only a seven percent chance of complete clarity.

Choosing the right communication process is a habit. Powers offers four key elements of communication to determine the best method for each situation.

4. Incorporate a Feedback Loop Nine times out of ten, we think we know what to do next, causing mistakes and reworking, Powers says. A feedback loop puts everyone on the same page.

1. Consider Purpose and Intent Be thoughtful before you communicate.

This builds trust.

• A message gets encoded by the sender.

• Why am I sending this? What do I want the receiver to do with it?

• What is the receiver’s style, pace, and knowledge level?

• What content do others need?

• How much information do they need?

• What is the chance of a misunderstanding?

• What is our relationship like?

2. Consider Assumptions Ask yourself as the Sender: • What do I know and believe about this person?

• What assumptions might the other person make that could impact how my communication is interpreted?

• How can I provide more clarity?

Ask yourself as the Receiver:

Tietze reinforces that when you can’t see someone’s face or hear the tone of voice, things are frequently misinterpreted and taken more personally. “For example, if someone has a dry sense of humor and makes a joke, but the receiver gets angry because it’s not possible to read the communication signals through text or email,” the mode of communication wasn’t the right choice. She reminds people to think about the conversation that needs to be had. “If there’s anything you think might be perceived as contentious or controversial, at least pick up the phone to hear the other person’s tone of voice.”

• What do I know and believe about this person?

Powers advises, “Choose your method based on what you’re communicating and how people are going to feel about it.”

• Using email and IM rests solely on your words carrying your message

• What assumptions could impact how I filter this communication?

• How can I get more clarity?

3. Make Use of Body Language • Meeting in person and being a clear speaker and a great listener has the chance of being 100 percent effective.

• Speaking by phone only includes the words you choose (seven percent) and the tone and inflection of your voice (35 percent) for a total of 42 percent effectiveness.

• It then gets sent through a communication medium.

• The receiver then decodes this information.

• Some type of feedback loop must take place. ©2015 Powers Resource Center, LLC “This is especially important with a conflict. People are not skilled in how to have a confrontation,” Tietze says. “And most people, without additional training, will be conflict averse. So, without those skills, the technology gives you another way to avoid the conflict. You can delude yourself that you’re not avoiding things because you are communicating, but you’re not doing the right thing at the right time.”

Tietze adds that the moment you sense a conversation is becoming contentious, go talk to the person. “Don’t argue over text, IM, or email. Confrontations first and foremost belong in person or over the telephone if you can’t do face-to-face” she says. “There’s too much room for misinterpretation with text, IM, or email.” If there’s just no way around it though, Tietze says to really think about it ahead of time. Add more words.

Clarify what you’re saying, as well as what you’re not saying, so people don’t over-interpret your words.

“These concepts aren’t rocket science, but we don’t do them,” Powers says. “Bad habits are so much quicker and easier. But good communication is what builds trust and transforms relationships.” s

Nov/Dec 2015 • www.cocpa.org •

13

Colorado Industry

The State of the State: Colorado's Manufacturing Industry

BY NATALIE ROONEY

The manufacturing industry tends to conjure images of giant smokestacks around steel factories belching black clouds into the sky. But today’s manufacturing environment has a new look. Think craft breweries, organic food, aerospace, and outdoor apparel. Colorado has all of these and more, helping the Centennial state’s manufacturing industry grow in new ways.

F

or decades, “Made in China” has been the catchphrase in manufacturing.

But Bart Taylor, founder and publisher of Company Week magazine, says there are significant and sustainable trends driving manufacturing back onto U.S. shores. Rising labor costs in China, political instability, and a general weariness of managing long supply chains are but a few of these trends. “There’s a new wave of business entrepreneurs who see opportunity in making products locally,” Taylor observes.

passion for their craft. With a million new residents poised to move to the state for the lifestyle, “We’re enjoying a surge in lifestyle businesses,” he says. “Cycling, cycling components, fitness and technical apparel, along with an aerospace community that’s thriving – all are examples of how manufacturing is vastly different from how it’s perceived.”

FINDING COMMON GROUND Tim Heaton is president of the Colorado Advanced Manufacturing Association (CAMA), a three-year old trade association created to meet the needs of Colorado’s growing manufacturing industry. Heaton says small- to medium-sized manufacturers don’t really have a voice on the state or national level. CAMA helps fill that void.

Many of those entrepreneurs are choosing the U.S., particularly the West. In fact, “The West is redefining what manufacturing means today,” Taylor adds. “Colorado is a vanguard of a new, retooling U.S. manufacturing sector.”

Taylor says what’s happening in Colorado doesn’t represent a “smokestack” industry.

“Manufacturing here doesn’t look like what we’ve been taught. Here in the Rockies, and generally in the West, manufacturing looks more like a craft beer maker, the natural and organic food industry, skis, medical and bioscience, and other lifestyle and consumer goods.” Company Week itself grew from a need these fledgling manufacturers had for information and to connect manufacturing entrepreneurs with vendors and suppliers.

Taylor says the Colorado market is emblematic of modern manufacturing.

Motivated entrepreneurs are driven by their

14

• NewsAccount • Nov/Dec 2015

“The small- to medium-size entities are the ones growing and which can benefit from joining together,” Heaton says.

“Manufacturers who survived the recession are leaner, smarter, automated, and focused on time to market. These companies know they can compete with offshoring by producing a better product closer to their customers,” he adds. “We’ve moved into a whole new generation of manufacturing.”

Heaton cites lower natural gas costs, labor costs that are nearing parity with Asia, and lower fuel costs as part of what makes the U.S., and Colorado in particular, a more cost effective place to do business.

WHAT’S THE FORECAST? Taylor says people are going to move to Colorado. But the question is, will we continue to see manufacturing gains? Jobs lost to offshoring over the past few decades likely won’t return to the same levels. “We can do more in manufacturing with fewer people than ever before,” Taylor notes. “Industrial productivity has never been higher, and employment has never been lower.”

Heaton says manufacturers are a conservative lot. The “bears,” who predict an economic downturn around the next presidential election, are battening down the hatches.

The “bulls” are split about the future. Some say the only thing holding Colorado back is its workforce. Others say the biggest limiting factor is real estate – the lack of it.

Marijuana grow houses have snapped up all of Denver’s warehouse and machine space.

“It’s difficult to expand in Denver because of that,” Heaton says. But that reality creates opportunity in other areas. “Growth is really strong in Northern Colorado and on the Western Slope,” he adds. “They’re well primed for an expansion in manufacturing.

But we need to address the limiting factors, or we won’t make it.”

Taylor says, “We need to look at manufacturing with our eyes wide open. It’s not the sector of our grandfathers. It’s a new and modern economy. We need to temper expectations and marshal resources in a realistic way.” s

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Nov/Dec 2015 • www.cocpa.org •

15

Accounting & Auditing Update

Time and Cost Savings for Manufacturing and Distribution Entities

BY CHERYL GEHLEN, CPA, AND SEAN McDONALD, CPA

I

n recent years, the Financial Accounting Standards Board (FASB) launched an initiative to make narrow-scope simplifications and improvements to accounting standards. The initiative is intended to maintain or improve the usefulness of information reported to users of financial statements while reducing cost and complexity in financial reporting.

Many business owners and practitioners alike are skeptical of the term “simplification” especially as it relates to financial reporting.

However, management involved in financial reporting, particularly in the manufacturing and distribution industries, should consider these three FASB Accounting Standards Updates (ASUs).

Simplifying the Measurement of Inventory (ASU 2015-11): Current standards require an entity to measure inventory by various definitions of lower of cost or market: replacement cost, net realizable value, or net realizable value less an estimated amount of profit margin (subject to floor and ceiling calculations), which results in multiple calculations and analyses. Under this ASU, an entity is required only to compare the cost of inventory to its net realizable value, which is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Entities measuring inventories of raw materials or work-in-process will not change with this update and will continue to apply current guidance.

This update does not apply to inventory that is measured using the last-in, first-out (LIFO) or the retail inventory method. This update does apply to all other inventory measurement methods, which include first-in, first-out (FIFO) and average cost.

The ASU is effective for public business entities for fiscal years beginning after Dec. 15, 2016, including interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after Dec. 15, 2016, and interim periods within fiscal years beginning after Dec. 15, 2017. The amendments in the update should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.

Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements (ASU 2014-07): It is common for manufacturing and distribution entities to lease their facilities from one or more commonly controlled entities for tax, estate planning, and legal liability purposes. This ASU incorporates a consensus of the Private Company Council (PCC) and allows private companies to elect to exclude from consolidation a lessor entity under common control, which typically requires consolidation under variable interest entity guidance. Under current guidance, users of the financial state-

16

• NewsAccount • Nov/Dec 2015

ments often request supplementary consolidating schedules to enable them to reverse the effects of consolidating the lessor entity.

To elect this accounting alternative, an entity must meet the following criteria: fit the definition of a non-public entity (as defined); lessee and lessor entities are under common control; lessee has a lease arrangement with the lessor, and substantially all the activities between the lessee and the lessor entity are related to leasing activities; and generally the amount of any guarantee or collateral arrangement by the lessee for an obligation of the lessor does not exceed the value of the leased asset.

This alternative is an accounting policy election that, when elected, should be applied by a private company lessee to all current and future lessor entities under common control that meet the criteria.

The ASU is effective for annual periods beginning after Dec. 15, 2014, and interim periods within annual periods beginning after Dec. 15, 2015. Early application is permitted, including application to any period for which the entity’s annual or interim financial statements have not yet been made available for issuance.

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08): At various stages in the life of a business, owners must make decisions to exit unprofitable lines of business, divisions, and geographic locations.

This ASU clarifies the financial reporting of discontinued operations under Generally Accepted Accounting Principles (GAAP) by raising the threshold for disposals that qualify as discontinued operations and requiring new disclosures for disposals that both meet and do not meet the new definition.

Prior to this update, a discontinued operation was defined as a component of an entity that had either been disposed of or was classified as held for sale, provided the ongoing entity did not have significant continuing involvement or significant continuing cash flows.

Due to the complexity and high number of disposals qualifying for discontinued operation, significant costs of compliance were incurred by preparers of the financial statements.

Significant changes include the following: • The concept of continuing cash flows and continuing involvement is no longer considered.

• Disposal of a component of an entity or a group of components of an entity is required to be reported as a discontinued operation, if the disposal results in a strategic shift that has or will have a significant effect on an entity’s operations and financial results.

• Financial statement disclosure is expanded to include more information about the assets, liabilities, income, and expenses that are being disposed, including the amount of any cash in-flows/out-flows expected from the discontinued operation following its disposal.

The ASU is effective in the first quarter of 2015 for public companies with calendar year ends. For most nonpublic entities, it is effective for annual financial statements with years that begin on or after Dec. 15, 2014. Early adoption is permitted but only for disposals that not have not been reported in previously issued financial statements.

The aforementioned Accounting Standard Updates merit consideration particularly for manufacturing and distribution entities looking to simplify their reporting processes. Adopting the ASUs may result in reduced time and cost of compliance – allowing more time to focus on other business needs. Professional accounting advice regarding the practicality of adoption is encouraged. s SOURCES:

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• FASB Accounting Standards Updates: • No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory • No. 2014-07 —Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements (a consensus of the Private Company Council) • No. 2014-08 —Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity Cheryl Gehlen, CPA, is an Audit Director with Anton Collins Mitchell LLP, Denver (ACM). Contact her at cgehlen@acmllp.com.

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Nov/Dec 2015 • www.cocpa.org •

17

Accounting Careers

Colorado Accounting Hiring in High Gear

BY NATALIE ROONEY

The AICPA recently released its 2015 Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits report showing that enrollments in undergraduate and graduate accounting programs increased in the 2013-14 academic year. And for the first time, enrollment topped 250,000 students.

On the recruiting side, accounting firms hired a record number of accounting graduates in 2014, representing a seven percent increase from the previous survey.

Firms and universities are optimistic that the growth of the accounting profession will continue. The survey reports that 97 percent of bachelor’s programs and 70 percent of master’s programs expect enrollment to be the same or higher within two years of responding to the survey.

Ninety one percent of firms reported that they expect to hire at the same or an increased level in the following year.

Sandy Rothe, CPA, managing partner for Deloitte LLP’s Denver office, says the organization is growing nationally at a nice pace, and Denver is exceeding the national trends. “The economy in Colorado continues to grow, and we need people in many disciplines,” he says. “We have such a diverse economy here. All of our service lines have grown.”

Rothe says Deloitte is planning for continued substantial growth. “We expect that we’ll continue to hire the same as or more in proportion to the growth we’re experiencing in the marketplace. We’re hiring at a record pace on the national level, as well.”

18

• NewsAccount • Nov/Dec 2015

Lauren Criner, Denver campus recruiter for Ernst & Young LLP, says the firm has experienced strong upward hiring trends for both interns and new staff over the past few years to meet demand. “We’re hiring across the board,” she says.

Lisa Hemann, CPA, principal at Chadwick, Steinkirchner, Davis & Co., P.C., in Grand Junction says the Western Slope is experiencing the same hiring trends and growth. CSD is a full-service tax and audit firm with a staff of 25. “Last year we were up in hiring, and we’re expecting to hire again this year,” Hemann says, adding that hiring has been spurred by the purchase of two smaller tax practices. “As a result, we had a big increase, and we’re looking to hire again this year in both tax and audit,” she says. “Our tax practice in particular is looking for more experienced people. On the audit side, we’re taking newer recruits and recent college graduates.”

The report shows data on enrollments and hiring on an upward trend and

increasing from the previous survey.

However, the combined number of undergraduate and graduate degrees awarded has slowed. Degrees awarded held steady at the previous record high level (less than a one percent decrease), which was driven by a sharp increase in master’s degrees awarded (31 percent) and a decline in bachelor’s degrees (11 percent).

The data also reveals a slight widening of the gap between the number of students who are graduating with accounting degrees and the number of candidates sitting for the CPA Exam.

Rothe says Deloitte hires with the expectation that new recruits will become CPAs. “We want them to be CPA eligible, and we encourage it as soon as possible,” he says. While there isn’t a strict requirement that someone sit for the exam within a certain timeframe, “we want them to get their CPA as soon as possible. For longer term career advancement, we want them to be CPAs,” Rothe says.

Criner says EY offers incentives to new hires who pass the CPA exam within their first two years with the firm. “It is necessary for professionals to earn their CPA before they’re promoted to the manager level,” she says.

Hemann says CSD used to have a policy that required everyone to sit for the exam and pass it within two years. “But we really weren’t adhering to it,” she says. “We encourage it strongly, but there might be someone who puts it off or doesn’t pass in that timeframe, and they’re still a great employee, so we don’t require it to stay employed with us. We just encourage them to do it.”

Hemann adds that the Western Slope and other areas outside of Denver want to hire, but they grapple with competition from the larger metropolitan areas. “For firms on the Western Slope, the challenge in finding people is that we’re competing with more metropolitan areas,” she explains.

“A lot of graduates want to go to Denver, Salt Lake City, or where they originally came from to start their career. Our ongoing challenge is getting people to stay here and work on the Western Slope.”

The results of the Trends report are consistent with the Bureau of Labor Statistics 2014-2015 Occupational Outlook Handbook, which reports that employment of accountants and auditors is expected to grow 13 percent from 2012 to 2022, representing an additional 166,700 jobs. The BLS Handbook notes that many accountants become CPAs to enhance their job prospects and gain clients, and some employers prefer to hire applicants with a master’s degree – which also aligns with the findings of the Trends report.

150 HOURS IN COLORADO The 150-hours of education rule, which requires individuals to have 150 hours of education to become licensed as a CPA, went into effect in Colorado on July 1, 2015. As one of the last states to adopt the rule, students and prospective employers were prepared for it. While many states early in the adoption process experienced a gap in student recruits during the transition, that phenomenon seems to have skipped Colorado entirely.

Deloitte and EY require new recruits to join with 150 hours already under their belt. CSD will accept strong candidates after 120 hours. s To view the AICPA 2015 Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits, go to www.aicpa.org/InterestAreas/AccountingEducation/ NewsAndPublications/DownloadableDocuments/2015TrendsReport.pdf.

FAQ's: Colorado Consumer Use Tax Remember when the Colorado General Assembly tried to force online retailers to collect sales tax by passing legislation in 2010?

The U.S. Supreme Court said not so fast. As a result, Colorado consumers are required to pay use tax annually on such purchases.

Here’s a quick summary on what, when, and how, provided by the Colorado Department of Revenue. For more information, go to www.colorado.gov/pacific/tax/use-tax-instructions-and-forms.

What is consumer use tax?

Every state that has a sales tax has a “companion” tax for purchases made outside the state through online, telephone, or catalogue ordering services. In Colorado, this tax is called “use tax.” To be compliant with Colorado law, the purchaser of goods from outside Colorado must report and pay use tax when sales tax is not collected by the seller on a taxable item, such as clothing, electronics, appliances, or other tangible property.

What is the consumer use tax rate?

The state consumer use tax rate is the same as the state sales tax rate, which are both 2.9 percent. Use tax also is collected by some special districts such as the metropolitan Denver Regional Transportation District (RTD) and the metropolitan Scientific and Cultural Facilities District (SCFD).

How do I know if I paid any tax on my purchase?

Check your invoice or receipt to see if tax was paid. Some online purchases will have sales or use tax included. Many online or outof-state retailers do not collect sales or use tax from customers on purchases.

When do I have to report and pay the tax? Is there a deadline?

Individual consumer use tax is due by April 15 for the prior tax year. For example, state and RTD/SCFD owed on items purchased during the year must be remitted to the Department on or before April 15 of the next year.

How can I determine how much use tax I need to report and pay?

Most online companies that didn't charge you sales tax can let you know how much you purchased during the prior calendar year which will help you calculate how much tax you owe.

Where do I report and pay consumer use tax?

Beginning with the 2015 Colorado individual income tax return, Form 104, use tax may be reported and paid when you file an income tax return, either electronically or on paper. You will report both the state and special district use tax on the income tax return. Alternatively, you may file Colorado Form DR 0252, Colorado Use Tax Return.

How do I know if I’m located in a special district area?

More than half of Colorado residents live in one or more special districts. Most residents of the Denver metropolitan area are within the district boundaries of both the Regional Transportation District (RTD) and the Scientific & Cultural Facilities District (SCFD). Refer to Form DR 1002, contact your county assessor’s office, or view district maps for additional information to determine whether you live within the boundaries of a special district.

Nov/Dec 2015 • www.cocpa.org •

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Movers & Shakers Gregory J. Anton, CPA, CGMA, Chairman and CEO with Anton Collins Mitchell LLP, Denver, received the Gold Medal Award of Distinction from the AICPA at its 2015 fall Council meeting. First presented in 1944, the award recognizes a CPA whose influence on the accounting profession as a whole is especially notable. It is the highest recognition the AICPA gives. Previous Colorado recipients include A. Marvin Strait, CPA, in 1992, Oscar S. Gellein, CPA, and Marvin L. Stone, CPA, in 1974, and Elmer G. Beamer, CPA, in 1970.

Diego J. Baca, CPA, Ernst & Young LLP, Denver, and Bridget J. Duzzie, CPA, PwC LLP, Denver, were chosen as two of 31 young accounting professionals from across the U.S. to participate in the 2015 AICPA Leadership Academy.

Gaylen R. Hansen, CPA, ABV, Audit Partner and Director of Quality Assurance with EKS&H LLLP, Denver, was elected to the Board of Trustees and Audit Committee for the American University of Iraq-Sulaimani.

Brian Mandell-Rice, CPA, Managing Partner, Hein & Associates LLP, Denver, was named to the Accounting Today 2015 Managing Partner Elite list. This annual honor recognizes a top-tier national list of managing partners for distinguished accomplishments in growing and leading their accounting or CPA firms.

The National Academy of Public Accounting Professionals (NAPAP) named Brandon T. Powers, CPA, MT, Senior Tax Manager with Anton Collins Mitchell LLP, Denver, one of its 2015 “Top 10 Public Accounting Professional Rising Stars” in Colorado.

The award recognizes outstanding public accounting professionals who have been practicing for fewer than fifteen years.

Dr. Sharon S. Lassar, CPA (Florida), Director of the University of Denver School of Accountancy, Denver, was appointed Chair of the AICPA Precertification Education Executive Committee which assists the AICPA in achieving its academic initiatives to grow and engage well-prepared, highly qualified accounting professionals.

Dr. Christine Z. J. Noel, CPA, Associate Professor, Metropolitan State University of Denver, was appointed to a four-year term on the Colorado State Board of Accountancy.

Classifieds Opportunities Available Here is your opportunity to live and work in the beautiful mountain community of Durango, Colorado, with all the outdoor activities you could want while working in a professionally challenging environment. We are a growing CPA firm specializing in income tax and financial planning services for high net worth individuals/businesses. We are currently looking for a CPA with 6-10 years of advanced tax experience and some management experience. The potential for future ownership exists for the right candidate. Send resume to Tafoya Barrett and Associates PC, Attn: Cindy Morin, 150 E 9th Street, Suite 300, Durango, CO 81301 or CMorin@TafoyaBarrett.com.

Sole proprietor in Montrose, CO area seeking an experienced CPA to assist in the preparation of 2015 tax returns and/or possible purchase of my practice consisting of tax return preparation, bookkeeping, payroll, etc.

Send responses to: jcote@cocpa.org with box #3619 in the subject line or call 970-708-7797.

Practices for Sale, Purchase, or Merger Fred Mehring, Select Business Group, Inc., specializes in the sale, merger, and acquisition of accounting and tax practices. Over 25 years of experience. Confidentiality stressed! Call Fred Mehring at 303-771-3100, fax 303-477-6010, or fmehring@selectbg.com.

We represent a number of quality CPA firms which are looking to merge, acquire, or sell their practices to other CPA firms or partners with business. Locations are in the Denver area. This is an opportunity to ensure your future as well as help your clients by expanding your services to them. Why settle when you can select?

Established in 1939. For further information, please contact: Phil Rubeck at D&R Associates of Colo., 720-446-7020, or email: dandrassociatesofco@aol.com.

In Memoriam

We regret the loss of the following COCPA member and extend our sympathy to his daughter MaryKate McCutcheon, CPA, family, and friends.

Harold H. Holligan Member since 1957 Pueblo, Colo.

Classified Ad Pricing $50 for 0-50 words, $100 for 51-100 words, $200 for 101-200 words, $300 for 201-300 words, $400 for 301-400 words.

Contact Jana Coté, jcote@cocpa.org, to place an ad.

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• NewsAccount • Nov/Dec 2015

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