Office of House Bill AnalysisS.B. 1037
By: Ellis, Rodney
Ways & Means


Several innovative approaches to auditing and collections may be able to
improve the efficiency and productivity of the programs administered by the
comptroller of public accounts (comptroller).  One such approach is
Florida's certified audit program, a cooperative effort between the Florida
Department of Revenue (DOR) and the Florida Institute of Certified Public
Accountants, the state's licensing program for certified public accountants
(CPA).  Under this program, taxpayers are allowed to hire, at their own
expense, qualified CPA firms to review their sales tax compliance.  As an
incentive to incur the cost of a certified audit, penalties are waived and
interest abated on the first $25,000 of interest and an additional 25
percent of any interest liability in excess of the first $25,000.  Except
in cases of fraud or misrepresentation, DOR will not audit taxpayers for
the same period or tax covered by the certified audit period.  Before a CPA
can be certified to conduct audits for the state, the CPA must pass an
examination after completing a state-prescribed self-study course and be
employed by a qualified CPA firm.  Taxpayers who have not been mailed a
notice of intent to audit are eligible for the program.  The program is not
available to taxpayers who collect a state tax but fail to remit it to the
state.  In Texas, a certified audit program, modeled after Florida's
program, could increase voluntary compliance by taxpayers while decreasing
state involvement in business.  Senate Bill 1037 authorizes the comptroller
to create a certified audit program to train and certify independent CPAs
to conduct tax audits.      


It is the opinion of the Office of House Bill Analysis that rulemaking is
expressly delegated to the comptroller of public accounts in SECTION 1
(Section 151.0232, Tax Code) of this bill. 


Senate Bill 1037 amends the Tax Code to authorize the comptroller of public
accounts (comptroller), by rule, to establish a program in which a taxpayer
may hire a certified public accountant (CPA) who is not employed by the
comptroller to perform an audit to determine a taxpayer's liability for a
limited sales, excise, and use tax.  The bill sets forth guidelines for
requirements and safeguards that  such a program must include. The bill
authorizes the comptroller to waive a penalty or all or part of the accrued
interest on an amount identified to be due as a result of an audit
performed under these provisions.      


On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.