Millage

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The tax rate on real estate, used to calculate property tax.  Millage is one of the three primary factors in determining property tax levies, the others being fair market value and assessment ratio.  Millage is applied and calculated in terms of mills per dollar.  One mill equals a tenth of a cent, or one-thousandth of a dollar.  To calculate property tax, divide the millage by 1,000 and multiply it by the property’s assessed taxable value.  A rate of 255.6 mills means a tax of 25.56 cents or .2556 dollars is to be charged per dollar of assessed value (assessed value is the product of fair market value and assessment ratio).

For example: For example, if the millage rate is 20, and the taxable value of your house is $200,000, the property tax is 0.020 x $200,000 or $4,000.

Typically, millage differs from county to county, and is determined by each local governing body each year. School districts, cities, counties, and public service districts all set their own individual millages.  As local governments are not supposed to receive a tax windfall, and are only supposed to collect tax in the amount necessary to fund operations and service debt, millage increases are capped.

[Last updated in July of 2020 by the Wex Definitions Team]