Non-Resident CPA Licensing Requirements (revised May 2010)
State boards of accountancy may refer to a “license” or the legal authorization to use the CPA title or to practice, in different ways. The legal authority may be called: a CPA certificate … an active certificate … a reciprocal certificate …a license …an individual permit or a firm permit … a temporary or provisional permit … a practice privilege …practice right, etc.
If professional services are performed for Louisiana clients, Louisiana requires that an out of state CPA obtain a license in Louisiana –or– be eligible for “practice privileges” — regardless of whether the CPA physically enters into the state.
Physical entry into Louisiana is not the determinant of whether the CPA needs a license or practice privileges here; rather, it is the offering to perform or performing services for Louisiana based client(s). A “Louisiana based client” includes individuals who are domiciled or reside in Louisiana; and, with respect to corporations or other organizations, it includes entities with a substantial business presence in Louisiana. Licensing or a practice right is required regardless of whether services are performed in person, by mail, by telephone, through the Internet or by any other means. Also note that a license or practice privilege would be required for an out of state CPA to perform a peer review of a Louisiana CPA firm.
CPA firms, which do not have an office or a place of business in Louisiana and which satisfy Louisiana firm ownership and peer review requirements, that provide services in Louisiana or to Louisiana clients are required to have a Louisiana firm permit only if they perform any of the following services for a client whose home office is located in Louisiana:
- audit or other engagement under SAS or Government Auditing Standards, or
- examination of prospective financial information under SSAE, or
- engagement in accordance with PCAOB auditing standards
Out of state CPAs have three ways to obtain a legal right to practice in Louisiana, that is, to perform services for Louisiana based clients. From the three (3) items below, you can select which may apply you. If applicable, you can download the form(s) and submit by regular mail your application or notice with the appropriate fee.
If a firm permit is also required (see above), please download the firm permit application form.
1. PRACTICE PRIVILEGES
CPAs who are domiciled outside of Louisiana and who do not have a principal place of business in Louisiana qualify for and may exercise CPA practice privileges in Louisiana (and no fee, notice, or application is required to be submitted to the Louisiana Board) under any of the following conditions:
(A) The CPA has an original license from a substantially equivalent state* (updated May 2010):
- The CPA maintains his or her original valid active CPA license (or permit to practice) that was issued by a “substantially equivalent” state, or
- The CPA previously held an original valid active CPA license (or permit to practice) that was issued by a “substantially equivalent” state, but because of a re-location of domicile and principal place of business to another state, he or she maintains a valid active CPA license from the other state that was issued under reciprocity, or
- The CPA previously held an original valid (active) Louisiana CPA license, but because of a re-location of domicile and principal place of business to another state, he or she maintains an active valid (active) CPA license from the other state that was issued under reciprocity.
- * “Substantially equivalent” states are those designated by the Louisiana Board as having similar licensing requirements to Louisiana requirements, and are as follows:
(B) Exception for individual substantial quivalency — A CPA [not qualifying under item (A) above] has individual qualifications substantially equivalent to the CPA licensure requirements of Louisiana, as follows:
The CPA holds a valid active CPA license issued by a state board of accountancy and has passed the Uniform CPA Examination (or IQEX examination, if applicable), and he or she:
- has 150 semester hours of college education and has at least one year of CPA supervised accounting related experience in the last four years, or
- has four years of experience outside of Louisiana as a practicing CPA (or Chartered Accountant if applicable) within the last ten years.
The “practice privileges” allow the out of state CPA the same rights as a licensed CPA, that is, to use the CPA title in Louisiana and serve Louisiana clients. The CPA may enter the state temporarily, as needed, to conduct engagements and/or to perform fieldwork.
By law, a CPA of another state exercising practice privileges in Louisiana and the CPA firm which employs the CPA consents, as a condition to the grant of this privilege, to the following:
- the personal and subject matter jurisdiction and disciplinary authority of the Board.
- compliance with the provisions of the Louisiana Accountancy Act and the rules and regulations adopted by the Board.
- in the event the license from the state of the individual’s principal place of business is no longer valid, the individual shall cease offering or rendering professional services in this state individually and on behalf of a CPA firm.
- the appointment of the board of accountancy which issued his license as his agent upon whom process may be served in any action or proceeding by this board against the licensee.
2. PROVISIONAL LICENSE
A provisional license is valid for 90 days on a one-time basis. There is a $100 fee. This is useful for one-time engagements and for reviewers on peer review engagements. It covers both the individual CPAs and the firm.
Applying for a reciprocal certificate and firm permit is the more traditional approach.
Out of state CPAs who did not obtain an original license from one of those states listed in item 1(A) or do not meet the exception in item 1(B), and CPAs who move to Louisiana would have to obtain a reciprocal certificate in order to use the CPA title, and a firm permit would also be required if they wish to practice. The CPA would become subject to Louisiana CPE requirements.
There is a $100 application fee for a reciprocal certificate and a $100 annual renewal fee. There is a $100 application fee for the firm permit. There may also be an annual firm renewal fee, as the firm renewal fee depends on number of owners who do not have LA license.
If employed by a CPA firm that already has a permit in Louisiana or if the CPA works in industry or government, the individual would only need the certificate in order to use the CPA title in Louisiana.
- Download Application for a Reciprocal Certificate as a Certified Public Accountant
- Download Instructions for a Reciprocal Certificate as a Certified Public Accountant
- Download Authorization for Interstate Exchange of Examination and Licensure Information
- Download Application for a CPA Firm Permit
Information on Cross Border Practice in the Southwest Region
The concept of “substantial equivalency” is being adopted by more state accountancy boards to facilitate the mobility of CPAs in a mobile society. This approach expedites the granting of practice rights to experienced applicants who must practice in more than one state. It measures college education, the passing of the CPA Examination, and qualifying experience against a national standard of the model Uniform Accountancy Act or against the home state’s accountancy act. Boards then can rely on the “substantially equivalent” jurisdiction’s determination that the CPA is in good standing to practice. Substantial equivalency promotes acceptance of a CPA’s qualifications without repetitive verification by each jurisdiction.
The Louisiana State Board and its neighboring state accountancy boards in the Southwest allow non-resident CPAs to become authorized to practice in a practical and expedited manner. While the requirements, procedures and terminology are not identical to each other, the state boards in Arkansas, Louisiana, New Mexico, Oklahoma, and Texas now can swiftly process nonresident CPA’s applications or notices for “practice privileges”. (The Louisiana Board also recognizes other states as noted above.)
The requirements to obtain the legal authority may be expressed in differing terms with similar meanings in the states’ documentation and their websites. “License”, “certificate”, and “permit” may have similar but slightly different meanings. However, just knowing the name of the form to can ease the process for one to become “legal” to serve clients in another state. Unless a CPA resides or has a principal office, and needs a permanent license to practice, in one of these states, the best approach may be to obtain a non-resident practice privilege. You can look on the boards’ websites under “Forms” or similar icons.
Forms for cross border practice privileges:
- New Mexico
Using this approach may allow CPAs to apply to a state board even after commencing services or entry to the state. However, each state’s definition of “entry” may be at different points including commencement of services, solicitation of services, or intending to enter, not just upon the physical crossing of boundaries.
State boards have a person on staff who is knowledgeable about their non-resident policies. Mention of that state’s title of the desired form, and/or the type of practice privilege desired will help direct you to the one person that has any additional information you need.
Is registration required of a CPA conducting business via the mail, internet, or other means without physical presence in another state? State boards generally do not distinguish between the communication media when determining the CPA’s requirement to be properly authorized to hold out to practice accounting in another state. If there is any doubt, contact the non-resident state board’s office for their current interpretation of licensure requirements concerning providing accounting services to their citizens.
Reciprocal Certificate, License, or Permit
A reciprocal certificate, license or permit is typically required if you move your office and/or residence into another state. Before the advent of “practice privileges”, this was the only method to obtain a legal right to use the CPA title and to practice in another state. A “reciprocal” license may be granted after an application process, which may include verification of college transcripts, examination, experience, and character references.
All states in the NASBA Southwest Region require that a CPA obtain a license or permit in the state where his or her principal place of business is. Each state may have additional requirements and may have differing policies.
The consequences of not being properly licensed in a state or jurisdiction range from embarrassment to enforcement actions including fines, cease and desist orders and notification to other authorities. Peer review standards now require firms to represent compliance with applicable regulations including licensure and permitting.
As a convenience, some of the information on this page refers to licensing requirements of other states, including those in the Southwest Region of the accountancy boards’ national association, NASBA. Our representations are not authoritative. You should contact the applicable state board of accountancy for its authoritative information – refer to our Links page to access other boards’ websites.