Bill > S1304

This bill allows cities and towns to implement a local option municipal income tax, which would be collected as a surcharge on residents' taxable personal income, to provide relief for residential property taxes. The decision to adopt this local income tax and the specific surcharge amount would require a vote by the municipality's legislative body and approval from voters in a municipal election. Importantly, this new income tax revenue is designated solely for reducing the residential property tax levy, and the property tax levy limit would be permanently adjusted by the amount of income tax collected. The state Department of Revenue would administer the collection of this surcharge on state income tax returns and then return the collected revenue to the respective municipalities. The bill also includes provisions for handling any surplus or shortfall in the collected income tax revenue by adjusting the following year's residential property tax levy, and it allows municipalities to exempt residents who qualify for low-income housing or senior housing from this surcharge.