An act to amend Section 22258 of the Business and Professions Code, relating to business.
Summary
SB 788 revises California’s Tax Preparation Act exemption rules for certain licensed accounting professionals and firms. Under existing law, tax preparers generally must register with the California Tax Education Council and provide required disclosures unless they fall within specified exemptions. This bill expands and clarifies those exemptions by specifying that an individual with a current and valid California Board of Accountancy license, or otherwise authorized to practice public accountancy under the cited law, is exempt. It also extends the exemption to a licensed accounting firm and its partners, shareholders, owners, and employees, so long as the firm itself holds a current and valid board license.
The bill preserves the existing framework for other exempt categories, including attorneys, trust companies, regulated financial institutions, IRS-enrolled preparers, and certain supervised employees. It also keeps the rule that employee-prepared returns must generally be signed by an exempt supervising person, and it clarifies that preparing a return includes entering tax data into a computer. The bill applies prospectively to tax returns prepared for taxable years beginning on or after January 1, 2025.
Impact
SB 788 amends Section 22258 of the Business and Professions Code, which governs exemptions from the Tax Preparation Act’s registration, disclosure, and related requirements. The practical effect is to broaden the class of accountants and accounting-firm personnel who may prepare tax returns without registering as tax preparers with the California Tax Education Council, provided the statutory licensing conditions are met. It also affects how firms structure supervision and signature responsibility for tax return preparation, while leaving the broader regulatory scheme intact for non-exempt preparers.
Sentiment
The bill appears to have been broadly supported and noncontroversial in the legislative process. The recorded votes were unanimous at each stage shown, including committee votes and floor votes, with no recorded opposition. That voting pattern suggests general agreement that the measure was a technical or clarifying change benefiting licensed accounting professionals and firms rather than a major policy shift.
Contention
No substantive opposition is reflected in the available committee or floor history. The main policy issue implicit in the bill is whether the exemption should apply only to individual licensees or also to firms and their personnel working under a firm license. SB 788 resolves that question in favor of broader firm-level exemption, while still preserving supervision and signature safeguards for employee-prepared returns. Any potential concern would likely center on whether expanding exemptions could reduce oversight of tax preparers, but no such objection appears in the provided record.
Enacting the professionals' freedom of expression act to provide protection for professionals and businesses against adverse action as a result of an expression of beliefs of such professional or business that is unrelated to such profession or business.
Payment rates established for certain substance use disorder treatment services, and vendor eligibility recodified for payments from the behavioral health fund.
Cover Outstanding Vulnerable Expansion-eligible Residents Now Act or the COVER Now Act This bill establishes a demonstration program to allow local governments to provide health benefits to the Medicaid expansion population in states that have not expanded Medicaid. Under the program, local governments may provide coverage for individuals who are newly eligible for Medicaid under the Patient Protection and Affordable Care Act (i.e., the Medicaid expansion population) for a maximum of 10 years, or until their respective states expand Medicaid. The bill provides a 100% federal matching rate for the first three years of program participation. The bill prohibits states from taking certain actions against participating localities, such as withholding funding, increasing taxes, or restricting provider participation. States that violate these requirements are subject to certain funding penalties.