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Keeping Watch: Post-Legislative Session Updates and Ongoing Challenges

July 20, 2023

by Mike Nelson

While the 2023 Washington State legislative session ended in April there are still many challenges and changes coming toward the profession in the months ahead. The Department of Revenue (DOR) and Washington State Board of Accountancy (WBOA) are both going through rulemaking.

Capital Gains Tax 
The capital gains tax was upheld by the State Supreme Court on March 24. Many taxpayers and their CPAs then had to quickly turn around and remit the tax by the April 17 deadline. While many extensions were granted until October 15, the state collected over $800 million dollars from this new tax.  

Ever since the tax was originally signed into law in 2021, the WSCPA advocacy team and CPAs across the state have been warning the legislature and DOR about many issues with the tax as it was written. Given the controversial nature of the litigation around the tax, the legislature did not amend, and DOR did not provide guidance or engage in in-depth rulemaking, to address the common problems practitioners and taxpayers are now facing.  

We expect legislation in the 2024 session from DOR to address some of the technical issues that they have previously found in the law. The DOR has also said they will be providing more guidance and engaging in rulemaking throughout the remainder of 2023 and in advance of the next tax season.

In addition to the many administrative and policy considerations that will be hopefully addressed with either legislation or rulemaking, we are continuing to ask that DOR improve the filing software to accept common software that practitioners are using.

Exam Requirement and Window Changes 
Many changes to the rules around the CPA exam have come into place and more changes are expected through the start of the new exam in January 2024. At the Washington State Board of Accountancy (WBOA) January meeting, WBOA approved a new rule that lowers the education threshold for students to take the exam from 150 hours to 120 hours. This new rule went into effect April 1 and already many candidates have started taking the exam earlier than previously allowed.  

The new exam as part of CPA Evolution will roll out in January of 2024 with a renewed focus on technology throughout all sections. As part of the transition to the new exam, NASBA proposed, and the WBOA adopted, an extension of the exam window for candidates currently taking the exam, since they will have to finish with a new exam. This extension allows any candidate who has earned credit for any sections as of December 31, 2023, to have a new 18-month window starting on January 1. This means that anyone currently in the exam window has until June 30, 2025, to complete four sections of the exam.

At their April meeting, WBOA opened up the rule for the exam window to consider a permanent expansion. After an initial proposal by NASBA of extending the window to 20-months, NASBA formalized a 30-month window in their model rules. Board members had discussed windows of 36 to 60 months—or even no window—before creating a task force to look at options and present those options or a recommendation at the July meeting in Pasco. At that meeting, the public will be allowed to join the discussion on the exam window by providing comments directly to the WBOA. After receiving comments and feedback at the July meeting, the WBOA will likely propose a specific window length which would again allow the public to join the discussion at their October public comment meeting. Depending on the feedback shared during these meetings, the WBOA could elect to adopt a rule with a specific new window length as early as that October meeting.

The exam window discussion at the WBOA is being held in the context of national conversations around barriers to the profession and options of increasing the pipeline of new CPAs coming into the profession. Future changes and programs both at the state and national level will continue as these conversations continue. 

Mike Nelson is the WSCPA Manager of Government Affairs. You can contact Mike at