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Tax committee rejects sponsor’s packaged income-tax overhaul and offsets (LD229)
Summary
The Taxation Committee voted on a sponsor-led package (LD229) that would have reworked income-tax brackets and attached homestead, property-tax fairness, sales-tax fairness, diaper sales-tax exemption and residential electricity exemptions; the motion to report the package failed on a divided roll call.
Representative Ann Matlac, sponsor of LD229, asked the committee to take up an updated income-tax amendment and to attach several bills she said would direct revenue to targeted relief: an updated set of tax brackets (five brackets; top rates at 7.75% and 8.95% beginning Jan. 1, 2026), a $7,000 increase in the homestead exemption, an increase in the property-tax fairness credit, the sales-tax fairness credit, an exemption of diapers from sales tax (LD1099), and an exemption for residential electricity sales/delivery (LD2078). Matlac said the package was intended to be revenue-producing and to fund bills the committee had previously advanced.
Analyst Steven Langland summarized the bill’s history: the bill had been amended previously (divided report last session) and would need to be re-amended if the committee chose to retain the prior session’s language. He noted the committee had possession of the bill since the prior June and that relevant timing and indexing dates would need adjustment if the amendment is reintroduced.
Committee members debated whether packaging multiple measures was the right vehicle and how appropriations would handle funding. Representative Bernicki and others argued the work could be handled through existing study or task forces; Representative Matlac and supporters argued the package would deliver relief to working households. Senator Graowski seconded the sponsor’s motion to amend and report the measure.
The committee took a roll-call vote on the motion to report LD229 as amended; members recorded in favor included Representatives Scott Haramman and Ann Matlac, the chair, Senator Graowski, Senator Mike Tipping, Representative Freriedman and Representative Ed Crockett. Those recorded opposed included Representatives Gregory Swallow, Quint, (transcript: “Rudiki”), Thomas Lavine and Russ White. The transcript shows the motion did not carry (committee reported 'ought not to pass' as recorded in the minutes).
Representative Matlac said staff and the analyst may continue to work with the sponsor on drafting; no final appropriations or effective-date implementation was finalized during the work session. The committee then closed its agenda and made a brief public announcement about a museum exhibit on Monday.
