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LSDefine
Simple English definitions for legal terms
Millage
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A quick definition of Millage:
Millage: Millage is a tax rate used to calculate property tax on real estate. It is one of the three factors used to determine property tax, along with fair market value and assessment ratio. Millage is measured in mills per dollar, with one mill being a thousandth of a dollar. To calculate property tax, you divide the millage by 1,000 and multiply it by the property's assessed taxable value. Different local governing bodies set their own millage rates, including school districts, cities, counties, and public service districts. Millage increases are capped to prevent local governments from receiving a tax windfall.
A more thorough explanation:
Millage is a tax rate that is used to calculate property tax on real estate. It is one of the three main factors that determine property tax levies, along with fair market value and assessment ratio. Millage is measured in mills per dollar, with one mill being equal to a tenth of a cent or one-thousandth of a dollar.
If the millage rate is 20 and the taxable value of a house is $200,000, the property tax would be calculated as follows: 0.020 x $200,000 = $4,000.
Each local governing body, such as school districts, cities, counties, and public service districts, sets its own millage rate each year. This rate can vary from county to county. However, local governments are not allowed to collect more tax than is necessary to fund their operations and service debt, so millage increases are capped.
Overall, millage is an important factor in determining property tax and is used to ensure that local governments have the necessary funds to provide services to their communities.