S. 866, the Municipal Tax Relief Act. This bill gives municipalities a voter-approved, time-limited sales tax option to reduce property taxes on owner-occupied homes while funding clearly defined local infrastructure projects.​

S. 866 requires transparent referendum language, caps the municipal sales tax rate and duration, and ensures that any leftover revenue is dedicated to additional property tax relief rather than general spending. It offers taxpayers clear guardrails and more local control over how they balance sales and property taxes.​

Thank you for your consideration and for your service. 

Here is what the bill does: 

S.866 gives municipalities an option to shift part of the local tax load off homeowners’ property tax bills and onto a voter‑approved, time‑limited local sales tax.

Main benefits to taxpayers

• Allows a city or town, with voter approval, to impose up to a 1% municipal sales tax dedicated to property tax relief for owner‑occupied homes and specified capital projects.
• Allows residents to vote whether to adopt the tax at a November general election and to renew it after it automatically sunsets (after eight years or when listed projects are completed).

How it reduces property taxes

• Requires that sales tax revenue be used to provide a credit on municipal property tax bills for eligible homeowners, or a mix of credits plus funding for listed infrastructure or capital projects.
• Keeps any leftover revenue, after funding the voter‑approved project list, earmarked for additional property tax relief rather than general spending.​

Guardrails and predictability

• Mandates specific referendum language that lists proposed projects and discloses that remaining revenue must go to property tax relief, giving taxpayers clarity about how money will be used.
• Limits the municipal sales tax to a maximum rate (1%), a set duration, and a defined purpose, so taxpayers can see both the added sales tax cost and the expected reduction in their property tax burden.