AUGUSTA – The constitutional amendment failed to garner the two-thirds vote required to pass.
The bill would have sent the question to the ballot box, asking Maine voters if they would want to do away with the tax.
Democrats have argued the 1.7 billion dollar proposal would disproportionately benefit the wealthy and lead to massive education cuts.
LePage and House Republicans say the proposal would make Maine more competitive and attractive to businesses. Lepage has vowed to spearhead a citizen petition to get the question on the ballot.