Senate State, Veterans, & Military Affairs

Thursday, February 26, 2026·29m·▶ Watch / Listen

Barbara Kirkmeyer's bid to exempt overtime pay from state income tax beginning in tax year 2027 cleared the committee to Appropriations, but not before fiscal analysts warned the deduction would deliver little to low-wage workers while risking a popular family tax credit — and two Democrats broke to vote no.

Key Actions

·State Overtime Compensation Income TaxPassed

Notable Quotes

“If you're working extra hours, you're picking up overtime and doing everything right. The government shouldn't punish you and punish that effort with higher taxes. Overtime is not a luxury for a lot of families.”
Barbara Kirkmeyer — The sponsor's core framing of the two-year overtime tax exemption as rewarding, not penalizing, hourly workers.

+ 4 more quotes

Votes

Referred to Committee on AppropriationsAction

Yes (3)William Lindstedt, Rod Pelton, Lynda Zamora Wilson

No (2)Tom Sullivan, Katie Wallace

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TranscriptPreview

I appreciate that and appreciate the opportunity to be here today to present Senate Bill 26056. People like first responders, police, fire, EMS, essential workers such as nurses, child care providers, home health aides, cashiers and retail clerks. There are some professions in the manufacturing that are production workers, machinists, purchasing agents, team assemblers, and a variety of jobs related to inspecting, testing and sorting. Manufacturing engineers, industrial engineers, welders, assembly operators, machine operators and inventory managers. These are examples of professions and people who receive and go after overtime. Members every day there are two parent families or even single families where they leave and they go to work, they leave their families and they go work and then they go and they spend as much time as they can on overtime. Because of the situation we're in in this state where we are unaffordable, we're one of the most unaffordable states for housing in the nation. I think we're like fourth or fifth when it comes to childcare and the cost of childcare and the unaffordability. We have parents that spend a lot of time away from their family that go and get overtime so that they can…

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