On January 13, Governor Christie signed legislation (A1545) supported by the NJSCPA that eliminates the “five-year death penalty” provision for CPAs and other licensed professionals. The legislation also streamlines the reciprocity process for out-of-state professionals applying for licensure in New Jersey. The bill will take effect in six months.
A1545 eliminates the current requirement that licensees who let their licenses lapse for more than five years must retake the CPA exam to get their license back. This requirement is often referred to as the “Five-Year CPA Death Penalty Law.” It often means the literal death of a CPA’s career as a CPA. In a survey of other states conducted by the NJSCPA, Texas was the only one of the 37 responding states that had a similar law.
Under A1545, retaking the exam is replaced with a new provision that allows a licensing board to review the circumstances of each lapsed licensee and tailor remediation to address the specific situation of the licensee before reactivating or reinstating a lapsed license. As an example, the Board of Accountancy would likely require that CPE be brought up to date before reinstating a CPA license. This provision is much more practical and efficient than requiring licensees to retake an exam that is often, as in the case of CPAs, extremely difficult even for applicants who are fresh out of college and who have been preparing for the exam for years.
The bill also streamlines reciprocity by allowing for quick licensure upon proof of out of state licensure from states with “substantially equivalent” standards. It currently takes up to six months for CPAs to get reciprocity in New Jersey due to the burdensome process in place now. Streamlining the reciprocity process is extremely important as the CPA profession becomes increasingly mobile and many CPAs practice on an interstate basis.
Makes sense, no?