CONCORD, N.H. (AP) _ New Hampshire's House reversed course and voted down a proposed income tax Tuesday, all but assuring that the state will preserve its status as one of two states with neither a general sales tax nor an income tax.

The 3.5 percent income tax was proposed as a way of meeting the state Supreme Court's Thursday deadline for a new, fairer system to pay for schools. The state now relies on widely varying local property taxes, which the court ruled unconstitutional in 1997.

The Republican-controlled House voted 211-168 against the tax, three weeks after a similar proposal passed. That version was changed in the Senate, forcing another House vote Tuesday.

Gov. Jeanne Shaheen, a Democrat, had promised to veto an income tax. She has proposed a solution based on a statewide property tax, revised and expanded business taxes, a capital gains tax and video gambling at the state's four race tracks. The Senate is expected to vote on a version of her plan Thursday.

Towns will have no authority to collect property taxes for schools after Thursday, although tax bills are not scheduled to be issued until June. Two large banks have said they will continue to lend money to school districts while a solution is in the works.

Unsure of how much money they will have next school year, some school districts already have notified teachers their contracts won't be renewed. Many more districts are expected to issue pink slips if no solution is found by April 15.

Nine states have no income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. New Hampshire and Alaska also have no general sales tax.