As the SNP is running the Scottish Government as a minority administration, it needs the support of one of the other main parties to get its plans through. The Lib Dems support the principle of a local income tax, but are adamant that it must be set locally, by individual councils, rather than by the Scottish Government at 3p in the pound.
All three contenders for the leadership of the Scottish Lib Dems confirmed yesterday that this remained their position, and all insisted that they would not compromise on the principle of a "local" income tax.
The BBC's Brian Taylor suggests that the Lib Dems may find themselves with a tough choice if the SNP are prepared to accept this option:
There are political and practical problems aplenty with either option. Back Labour/Tory - and be painted as the defender of the council tax, abandoning your own manifesto.
Back the SNP - and what? If LIT [local income tax] is popular (OK, no tax is popular - less hated, then), won't the SNP just take all the credit? If LIT bombs, will the Lib Dems share the blame?