DAYTON, Ohio (WDTN) – What is a mill levy, and how does it work?
According to Investopedia.com, a mill levy is: “An assessed property tax rate used by local governments and other jurisdictions to raise revenue to cover annual expenses.”
A mill levy is calculated by determining how much revenue each taxing jurisdiction will need for the upcoming year, then dividing that projection by the total value of property within the area.
An example, if the entire property value in an area is $100 million, and the school district needs $150,000, the tax levy for the school district would be $150,000 divided by $100 million, then multiply the answer by 1,000. The answer is 1.5 mills.
To figure what you would owe from the mill levy, you need the taxable value of your property. To figure the taxable value:
- multiply the assessed value (what it’s worth) by the assessment rate for the type of property.
- Then multiply the taxable value by the mill levy.
- and divide by 1,000 to find your property tax bill.
In an example used by smallbusiness.chron.com, if you own a warehouse worth $500,000 that’s assessed at 50 percent, multiply $500,000 by 0.5 to find your taxable value, which would be $250,000.
- If the mill levy is 1.5, multiply $250,000 by 1.5 to get $375,000.
- Divide $375,000 by 1,000 to find your warehouse property tax bill – which would be the property tax bill, which is $375.
Before this can begin, you need to know what your property is taxed. You can find this information on your county auditor’s website.