Bill > S1447

This bill allows cities and towns to create a local income tax as a way to reduce property taxes for residents. If a municipality's legislative body votes to adopt this option and voters approve it in an election, a surcharge will be added to the personal income tax of residents within that municipality. This surcharge will be collected by the state's Department of Revenue, which will then return the collected funds to the municipality. The revenue generated from this surcharge must be used exclusively to lower the residential property tax levy, and it will permanently adjust the limit on how much can be collected from property taxes. The bill also outlines how any surplus or shortfall from the income tax surcharge will affect the property tax levy in the following year, and it includes an exemption for residents who qualify for low-income housing or senior housing. The existing laws regarding property tax assessment and levy limits will remain in place.