Millage Rate
Categories: Accounting
"Here’s a statement that probably won’t shock too many folks out there: most people don’t really enjoy paying taxes all that much. But we do tend to enjoy the things that taxes provide, like roads and schools and running water and stuff. As homeowners, in addition to any income, sales, and other forms of taxes we might pay, we also pay property taxes every year. And when it comes to figuring out how much a particular property owner owes, experts use something called the “mill rate.”
The “mill rate” is the taxable amount per dollar of the assessed taxable value of our property. A “mill” is equal to one-tenth of a cent, and the mill rate tells us how many mills per dollar of assessed value we’re going to have to pay. Let’s walk through an example. Let’s say our house is worth $300,000, and our mill rate is 5. That means that, for every $1,000 of property value, we’ll pay $5. So for a $300,000 house, our property taxes this year should be right around $1,500. Not bad, in the grand scheme of things; Hartford, Connecticut, by contrast, has a mill rate of 74.59. That means that on a $300,000 house, we’d owe over $22,000 in property taxes.
Why are mill rates in some places (like Hartford) so much higher than in others? Well, it depends what we’re taxed for. Things like schools and emergency services are often funded by property taxes, so if we’ve got a ton of nearby schools or high police salaries, that can impact how much we pay. Or if we live somewhere like Texas or Florida, we don’t pay state income tax, so the revenue needs to be collected from elsewhere. If we want to know how much we might owe in a given town, county, or state, we can usually find an online tax calculator for the area in question. "
