MILL RATE Meaning and
Definition
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The term "mill rate" refers to a financial concept used to calculate property tax rates. Specifically, it represents the amount of tax homeowners must pay per each thousand dollars of their property's assessed value. It is commonly expressed in terms of "mills," with one mill equal to one-tenth of one percent or one thousandth.
To determine the mill rate, local municipalities, counties, or taxing authorities take into account the amount of revenue required to fund their operations and services such as schools, police, fire services, and infrastructure. They divide this total revenue by the assessed value of all taxable properties within their jurisdiction. The resulting figure represents the mill rate needed to generate the necessary revenue from property taxes alone.
For instance, if a property is assessed at $200,000 and the mill rate is set at 20 mills, the property tax owed would be $4,000 (20 mills multiplied by $200). It is worth noting that mill rates can fluctuate over time due to changes in government spending, inflation, and property valuations.
The mill rate plays a crucial role in property tax calculations and serves as a key determinant of how much homeowners must pay in taxes annually. These funds are essential for supporting local government services and maintaining public infrastructure, contributing to the overall provision of community services and amenities.
Common Misspellings for MILL RATE
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Etymology of MILL RATE
The term "mill rate" has its etymological origin in the word "mill", which refers to a unit of currency equal to one-tenth of a cent. The term dates back to the 1800s when it was commonly used in the United States and Canada. Originally, a mill was a physical coin used in transactions, but over time, it came to represent the concept of a value or tax rate. Thus, "mill rate" refers to a property tax rate expressed in mills, where each mill represents one-tenth of a cent or one-thousandth of a dollar.
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