It took a roundabout way to get there, but the House (last night) and the Senate (today) passed Senate Bill 884, the bill that became the vehicle for the corporate income tax reform that we talked about late last month. The final bill sets the new corporate income tax rate at 4%, making it the second-lowest corporate income tax in the country. The rate will go into effect in 2020 and should be roughly revenue-neutral, thanks to other provisions in the reform package.
That isn't to say that the bill passed without drama. The initial, proposed corporate income tax rate was originally going to be 3.5 percent, based on Department of Revenue projections of what a revenue-neutral rate would look like. Unfortunately, that initial figure included a calculation error, and while the eventual 4-percent rate was the result of a better estimate, some legislators still had misgivings about that figure, too. Ultimately, however, the revised bill passed comfortably in both chambers.
Much can (and should) be said about the the fiscal note process and fiscal note products of the Missouri legislature, and no doubt much more will be said about it. For now, however, it is enough to say that the leaders who got this over the finish line deserve credit for their efforts and commitment to this important reform.