Mill Levy: What it Is and How It Works
A mill levy is a property tax rate expressed in mills. One mill equals one dollar of tax per $1,000 of assessed property value (0.001 in decimal form). Local taxing jurisdictions—such as school districts, counties, and cities—set mill levies to raise revenue for public services like schools, infrastructure, and parks.
How It Works
- Local taxing authorities estimate the revenue they need for the coming year.
- They divide that required revenue by the total assessed value of all taxable property within their jurisdiction to determine their individual levy rate.
- The rates from multiple jurisdictions that apply to the same property are combined to produce the total mill levy for that property.
- Assessed value is typically set by a tax assessor and may be a percentage of market value (assessment ratio), depending on local rules.
How to Calculate
Formulas:
– Mill rate (in mills) = (Revenue required / Total assessed property value) × 1,000
– Tax owed = Assessed value × (Total mills ÷ 1,000)
– Equivalently: Tax owed = (Assessed value ÷ 1,000) × Total mills
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Steps:
1. Add the revenue needs for each taxing authority.
2. Divide each authority’s revenue need by the total assessed value to get its levy (decimal).
3. Convert decimals to mills by multiplying by 1,000 and add them to get the total mill levy.
4. Multiply your property’s assessed value by the total mill rate (mills/1,000) to find your tax bill.
Examples
Jurisdiction calculation:
– Total assessed property value in area = $1,000,000,000.
– School needs = $100,000,000 → 0.10 (100M / 1B) → 100 mills.
– County needs = $10,000,000 → 0.01 → 10 mills.
– City needs = $50,000,000 → 0.05 → 50 mills.
– Total levy = 0.10 + 0.01 + 0.05 = 0.16 → 160 mills.
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Property tax calculation:
– If your property’s assessed value = $200,000 and the total mill levy = 160 mills:
– Tax owed = $200,000 × (160 ÷ 1,000) = $32,000.
(Example amounts are illustrative; actual assessed values and mill rates vary widely.)
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Applicability and Frequency of Changes
- Mill levies typically apply to real estate (land and buildings) and may also apply to significant personal property (vehicles, boats, business equipment), depending on local law.
- Mill rates can be adjusted annually or as needed to meet budget requirements. Changes are commonly subject to public hearings or approval by local governing bodies.
FAQs
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What is one mill?
One mill = $1 of tax per $1,000 of assessed value (0.001). -
Who sets the mill levy?
Local taxing authorities (school districts, counties, cities, special districts) set their own levies; the total is the sum of applicable jurisdictions. -
Is the mill levy the same as property tax?
The mill levy is the rate used to calculate property tax; property tax is the dollar amount owed. -
Can personal property be taxed?
Yes—many jurisdictions tax certain personal property (vehicles, boats, business equipment) using the same or separate mill rates. -
How can I find my mill rate?
Check your local tax assessor’s office or county/city website for current mill levies and assessed value information.
Bottom Line
The mill levy determines how much property owners pay toward local services by applying a standardized rate per $1,000 of assessed value. Understanding how mill levies are calculated and combined across jurisdictions helps property owners anticipate tax obligations and engage in local budgeting and tax decisions. If you need specifics for your property, contact your local tax assessor or a tax advisor.