Millage is a financial term that refers to a method of calculating and measuring property taxes. It is derived from the Latin word "millesimum," meaning "thousandth part," and is commonly expressed as a rate or ratio. Millage represents the amount of tax payable per thousand dollars of assessed value of a property. It is used by government authorities to determine the property tax burden on real estate owners.
To calculate property taxes using millage, the assessed value of a property is multiplied by the millage rate. For instance, if the assessed value of a property is $200,000 and the millage rate is 10 mills, the property tax would be $2,000 (200 x 10 = 2,000). Consequently, a higher millage rate results in a greater tax liability.
Local governments, including municipalities, counties, school districts, and other taxing entities, often establish millage rates to generate revenue for public services and infrastructure. These rates are typically expressed in terms of mills, with one mill equaling one-tenth of a cent or $0.001. Thus, a millage rate of 10 mills equates to $0.01 per dollar of assessed value.
Millage rates can fluctuate over time depending on the financial needs of the governing bodies. They are often subject to public scrutiny and may be set through a process involving public hearings, budget discussions, and legislative approval. Property owners are usually notified of changes in millage rates through their annual property tax assessment notices.
In conclusion, millage is a measurement used to determine property tax obligations, reflecting the amount of tax per thousand dollars of assessed property value.
