Rep. Lucas Lanigan (R-Sanford) said Monday that there will be a public hearing Tuesday afternoon on his tax relief bill for low and middle-income earners, LD 533 – “An Act to Exempt Overtime Pay from Individual Income Tax.”
The proposed legislation would exempt overtime pay from individual state income tax if the employer is legally required to pay the overtime to the employee.
Lanigan said the bill will not only provide much-needed tax relief to those who have been affected by the rising prices of everyday items but also create incentives for individuals to work extra hours to get ahead financially.
“We need to give tax relief to our low and middle-income earners, those hit hardest by historic price increases for everyday items,” he said. “My bill will provide tax relief and address the worker shortage by creating additional incentives for people to work extra hours to get ahead.”
The bill doesn’t have a fiscal note yet, so it’s unclear how much money it would allow workers to keep.
The tax change would amount to a sizable pay increase for some state workers. According to state records, more than 800 state employees earned more than $10,000 in overtime in 2021, the most recent year for which state salary data has been made available.
The bill will have a hearing before the Committee on Taxation Tuesday afternoon, but it’s not likely to find support among Democratic lawmakers.
On Friday, bipartisan budget negotiations broke down after Democratic leaders rejected a modest tax reduction proposed by Republicans.
