The Alabama House of Representatives has unanimously passed a bill to exempt overtime pay from the state income tax, an idea lawmakers praised as innovative.

House Minority Leader Anthony Daniels, D-Huntsville, sponsor of the bill, said it would help employees by allowing them to keep more of what they earn. And he said it would be an incentive for work that would boost productivity for businesses. The bill says earnings received by a full-time hourly employee for work performed in excess of 40 hours in a week does not count as gross income for purposes of the state income tax, which carries a 5 percent rate.

The bill says the exemption will expire after three years unless the Legislature extends it. That will provide a chance to evaluate the impact of the exemption because the idea has not been tried before.

The fiscal note from the Legislative Services Agency estimates that the bill would reduce revenue to the Education Trust Fund by $45 million a year.

But Daniels said some of the tax revenue the state would lose because of the exemption would return in the form of sales taxes to local and state government because of how employees would use the extra money in their paychecks.

“You not only thought outside the box. You created a box,” Rep. Barbara Drummond, D-Mobile, told Daniels.

The House passed the bill, HB217, by a vote of 105-0. It goes to the Senate.