Like almost everyone else, the heads of the New Jersey Society of CPAs were surprised when they heard combined reporting was included in the budget compromise between Gov. Phil Murphy and legislative leaders.
“We were under the impression that, because of the complexity of this type of initiative, that it was going to be done after the budget was approved,” CEO and Executive Director Ralph Thomas said. “So, yes, we were surprised.”
Surprised, but not surprised, said Government Relations Director Jeff Kaszerman.
“It was a surprise, because that was not what was supposed to happen, but, of course, it wasn’t a surprise, because anything can happen,” he said.
Thomas and Kaszerman said the accounting group has had contact with members of the governor’s administration and the Legislature on the subject since the beginning of the year.
They are hopeful they’ll soon be getting another call — although they haven’t heard anything yet.
Thomas and Kaszerman said it could take anywhere from a month to three months to craft the rules behind the provision.
“I would really depend on how quickly they wanted to work on it,” Kaszerman said. “We’ve got a team of experts. If they wanted to start working on it today, if we really rushed our people, we could get it done in a month or six weeks. To do it right, I would say at least three months.
“Even if you get a room full of experts on combined reporting, they themselves don’t always agree with each other. It’s not an easy thing to do.”
That’s why Thomas said it’s important to have the right people in the room.
“Our goal is to ensure that whatever is crafted is done correctly,” he said. “There are issues that can make it really difficult for businesses to comply.”
Thomas said he could understand why combined reporting may have been added to the compromise late in the deal.
“Because 26 other states and the District of Columbia are doing it, it was a concession that could be thrown on the table and would not put us at a competitive disadvantage,” he said.
And so many other states using it ultimately could make it easier for New Jersey to craft its own rules.
“What we’ve suggested is, ‘If you’re going to do this, take a look at what other states are doing,’” Thomas said. “Our concern is New Jersey being competitive. Our hope is that, that is the approach they are trying to do, as opposed to starting something from scratch, because that would minimize the time necessary to get this done. If you start from scratch, you could be talking about three months.”
Even more, Kaszerman said, New Jersey can benefit from the errors of others.
“One of the things we would need to do is learn from the problems that other states have had,” he said. “We should talk to experts and figure out which state did it best, what changes we should make to our statutes, so we don’t have the various problems other states have had.”
The New Jersey Society of CPAs is just hoping to get the opportunity.
“We said, we’ve got a team of experts that can work with you on combined reporting,” Kaszerman said. “We don’t have a position on the issue, but we want to make sure it’s drafted correctly so it’s easy to comply with.
“We reached out to them several times and offered our assistance to help them craft a bill, but we never heard back from them. We’re hoping we will now.”