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Committee approves exemption of Social Security benefits from income tax, despite fiscal concerns
Summary
House Bill 148 to exempt Social Security benefits from the state income tax passed the House Taxation Committee 14-7. Supporters called the exemption conceptually sound; critics warned the fiscal note projects roughly $136 million in lost revenue in FY27, rising to about $150 million by 2029.
House Bill 148, introduced by Rep. R. Marshall, to exempt Social Security benefits from the state income tax, received committee approval after debate over the proposal's fiscal impact.
Representative Fain said he supports exempting Social Security in concept but cautioned about the fiscal note. He cited the committee fiscal estimate that the measure would cost about $136,000,000 in lost revenue in fiscal year 2027 and grow to roughly $150,000,000 by 2029, and suggested a graduated implementation could limit the budget hit. Representative Weber argued that many states that exempt Social Security have other tax sources, such as a sales tax, that help backfill revenue losses.
After discussion the committee conducted a roll-call vote; the clerk reported 14 ayes and 7 nays and House Bill 148 passed the House Taxation Committee and will move forward for further consideration.
House Bill 148: sponsor R. Marshall; subject — exemption of Social Security benefits from the state income tax. Next step: advance from committee per committee vote (14-7).
