After plowing fruitlessly through dozens of proposals to cut property taxes, the North Dakota Legislature appeared ready to embrace a plan to use the state's income tax form to offer breaks for property owners.

Senators voted 45-0 on Monday to approve the idea, which offers North Dakota property owners the chance to subtract 10 percent of their property taxes as a credit against the state income tax they owe.

It is part of a $104.4 million package of tax cuts that includes benefits for married couples, low-income North Dakota seniors, and people with disabilities. The bulk of the benefit, $92 million, is devoted to the income tax credit plan.

The North Dakota House still must vote on the legislation.

The 10 percent deduction would apply on next year's tax returns. It could be lowered in 2009 if taxpayers claim more than $44 million in credits next year.

Each taxpayer may claim a credit of no more than $1,000, which helped to keep down its estimated cost, said Sen. Dwight Cook, R-Mandan.

"Over the years, the Legislature has mastered … the talent, or the ability, to take money from the citizens through taxes," Cook said. "But here, we're trying to give some back, and we're trying to give it back in a manner in which everybody can be happy, and my gosh, it is a difficult thing to do. It seems to be a great challenge for us to figure out how to give $100 million back."

The legislation does not benefit renters who do not pay property taxes on other landholdings. It also does not benefit businesses unless the business owner pays North Dakota's individual income tax.

During Senate debate Monday, some lawmakers questioned the lack of benefit for renters and wondered whether low-income families who own homes and have relatively low income tax bills would get any meaningful break.

Sen. Elroy Lindaas, D-Mayville, said the plan shifted the Legislature's focus from reducing property taxes to granting an income tax break.

"Property tax is not based on the ability to pay. Income tax is. And frankly, I don't know of anybody who has gone broke paying income tax," Lindaas said.

The legislation also includes a tax credit of up to $300 for married couples to offset a "marriage penalty" that some pay. The penalty refers to a circumstance in which a married couple can owe more state income tax if they file a joint return than they would if they were single and filing separately.

The credit eliminates the marriage penalty for couples who make up to $154,200 annually, and lessens it for those who make higher incomes, the state Tax Department says.

Another feature is the bill's expansion of the homestead tax credit, which is a state aid program for poor North Dakota seniors and people who are totally and permanently disabled. The credit helps beneficiaries pay their property taxes.

At present, the annual income maximum for someone to benefit from the homestead tax credit is $14,500. The legislation increases the maximum income to $17,500. The credit also covers the entire tax value of a home worth $75,000 or less, an increase from $67,511.

The bill is SB2032.