How is a mill (tax) rate calculated?

The mill rate, or millage rate, is calculated by dividing the budget by the total assessed value of the properties in a jurisdiction. This calculation provides the amount of tax per $1,000 of assessed property value that needs to be raised to cover the budget requirements of the local government or taxing authority.

When determining the mill rate, it is essential to understand that the budget represents the amount of money that the government aims to collect through property taxation. The total assessed value is the combined value of all properties subject to taxation. By dividing these two figures, you arrive at a rate that is expressed in mills; thus, for instance, if the result is 10 mills, it means that for every $1,000 of assessed property value, the taxpayer would owe $10 in taxes.

This calculation is fundamental in property taxation systems as it aligns the funding needs of the local government with the value of the properties being taxed, ensuring that the tax burden is proportionate to the assessed property values within that jurisdiction.