SPEAKIN’ OUT NEWS
A temporary state income tax exemption on overtime pay — in place since January 2024 — is set to expire at the end of June unless lawmakers act. Leading the charge to make it permanent is House Minority Leader Anthony Daniels, D-Huntsville, who first sponsored the measure and is now working to ensure Alabama’s workers don’t lose the extra take-home pay they’ve come to depend on.
As reported by AL.com, Daniels said the exemption was designed to help both workers and businesses at a time when labor shortages are straining key industries across the state. “It would allow workers to take home more of their pay and would help employers hire and retain workers,” Daniels told AL.com.
On Wednesday, Daniels and fellow Democrats in the Alabama House brought several workers to the State House to share how the exemption has impacted them personally. Among them was Mable McIntosh, a technician at the Georgia-Pacific plant in Pennington, who told AL.com, “A lot of our overtime is forced… We have to work overtime to keep production going in those mills.” She added, “To have that overtime be exempt, that’s important. That’s well deserved. And it’s something that should not be taken away from us now.”
Daniels has argued that, while the exemption has reduced state revenue — nearly $230 million in the first nine months of 2024, according to the Alabama Department of Revenue — the economic benefits make the policy worth keeping. As he told AL.com, “These are hard-working Alabamians that are putting into our economy… This is not money that you’re just handing out. These are not handouts. These are dollars that they’re earning.”
The original exemption passed with bipartisan support, and Daniels is now preparing legislation to extend it — this time with a study component to assess the full economic impact. He contends that the state’s growing economy and increased consumer spending justify keeping the policy in place.
“We hear all of this about the cost of it,” McIntosh said via AL.com. “But, hey, find it somewhere else. Don’t put that burden on the workers of Alabama.”
Daniels also pointed out that former President Donald Trump has endorsed a similar federal overtime tax exemption, further proving the policy’s broad appeal. “This is not a partisan issue,” Daniels said. “This is about rewarding work.”
While the House passed other tax relief measures this week — including a cut in the grocery tax and increased exemptions for retirement withdrawals — Daniels told AL.com that the overtime exemption is more impactful for working families. “A one-cent cut in the food tax is not enough to offset the sharp rise in many necessities, like eggs,” he said.
He added that the policy especially supports public servants and essential workers across Alabama. “You’re talking about your law enforcement that are working additional hours because they’re short-staffed,” Daniels said. “You’re talking about your firemen… the worker at Hyundai… the worker at Austal… the worker at Toyota… workers all across the state of Alabama.”
Nick Doty, a heavy equipment operator at the ABC Coke Plant in Tarrant, told AL.com the exemption made an immediate difference in his life. “For the first time, I feel like something has affected me immediately. Not tax breaks for big companies. Not tax breaks for huge corporations. But tax breaks for the regular, everyday Alabamian.”
As the session continues, all eyes are on Rep. Anthony Daniels, who remains the most visible and vocal advocate for keeping the overtime tax exemption in place. For Daniels, it’s not just about tax policy — it’s about fairness, respect for labor, and ensuring that Alabama’s economy works for everyone.
