A week ago, I outlined the most significant pieces of tax reform legislation coming from the state Senate. The pattern from the Senate appears to be to introduce “placeholder” bills each with a specific portion of what we may expect later in the session from a comprehensive tax reform package.
Yesterday, the House appeared to begin to follow suit, staring with a bill to lower the state corporate tax rate. HB 642 would lower the corporate income tax rate to 4.9% from the current 6.9% effective this tax year.
Recall that the Senate bill addressing corporate taxes would phase down the rate to 6% by 2015. Moreover, the Senate bill also eliminates many targeted exemptions to the corporate tax and addresses other technical issues like accelerated depreciation. The House bill just lowers the corporate tax rate and slightly raises the share of corporate tax revenue dedicated to the Public School Building Capital Fund.
The House bill appears to be the initial step in publicly revealing what the House has in mind for tax reform, and already reveals differences with the Senate plan.