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Millage Rate

A Property Tax Term

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Millage Rate: A tax rate that is applied to the assessed value of real estate. Millage rates are expressed not as regular percentages, but in tenths of a penny.  For example, a millage rate of 2 mills would mean 2 tenths of a penny.

 

Let's look at an example:  A tax district levies property tax at 5 mills and a homeowner's property has been assessed at $250,000.  The homeowner's property tax would be equal to:

5 mills = 5 x 1/1000 = .005

(a tenth of a penny is also equal to 1/1000 of a dollar.  Here we convert 5 mills into its percentage of one dollar)

.005 x $250,000 =

(tax rate x assessed value)

$1,250 in tax

 

Source: The American Heritage® Dictionary of Business Terms

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