Connect with us

Hi, what are you looking for?

News

House bill passes to eliminate income tax on overtime pay

The bill would save employees 5 percent on overtime pay accumulated over the course of the year.

(STOCK)
Getting your Trinity Audio player ready...

The Alabama House of Representatives voted unanimously in favor of a bill Tuesday that would eliminate state income tax on overtime hours.

House Minority Leader Anthony Daniels, D-Huntsville, said the bill would focus on participation rate in the state’s workforce.

“I will tell you that I heard from one of our employers in Mobile last evening talking about how this piece of legislation will be able to save some of the employees going over to Mississippi to work,” Daniels said. “I think this gives us another feather in our cap as a recruitment tool for the Department of Commerce.”

The bill is estimated to cost $45 million in revenue to the Education Trust Fund. An amendment was added to make the provision sunset after three years so that the Legislature can look back at the impact of the law and decide whether to extend it.

And Daniels said the hope is that much of the money lost directly from the ETF returns through the sales tax boost that employees will receive from keeping more of their overtime earnings.

“This bill I think is really unique,” said Rep. Danny Garrett, R-Trussville. “It’s the first one we’ve seen like this in the country. it’s an incentive to get our labor force participation up. It’s a great bill. I applaud you for thinking out of the box.”

The bill passed 105-0 and moves to the Senate.

Advertisement. Scroll to continue reading.

 

Jacob Holmes is a reporter at the Alabama Political Reporter. You can reach him at [email protected]

More from APR

Governor

The project is expected to create 130 jobs in Coosa County.

Opinion

The future of Alabama’s economy depends on a strong, resilient workforce.

Economy

Companies launching operations or expanding existing facilities in 2023 are poised to make investments totaling over $6.4 billion.

Opinion

Affordable and accessible child care is crucial to Alabama’s working families and the future of our workforce.