Millage Rates 101: Calculating Your Tax Bill
The millage rate calculation is not difficult. Here, step-by-step, is what your elected officials SHOULD do each year, and how you can estimate your own annual property tax bill:
The Government’s Role
1. The taxing authority must first formulate the budget, identifying all necessary expenditures. The budget process then projects expected non-tax revenue (fees, fines, interest income, franchise fees, etc.).
2. For most cities, counties and school boards, there will be a part of the budget that remains unfunded. That is the part that must be covered by your property taxes. It’s a revenue line item in the budget– we’ll call it [A].
3. Your Tax AssessorÂ values all property in the county for tax purposes. The total value BEFORE any exemptions is called the Gross Tax Digest. The Tax Commissioner, charged with collecting the taxes,Â then deducts from that number the value of any property completely exempt from property taxes, as well as the value of any other exemptions or deductions (homestead, senior, conservation use, etc.). The value that remains is called the Net Tax Digest. We’ll call it [B].
4. At this point, the calculation of the millage rate is very simple. [A] is divided by [B]. The result is the amount of tax, in dollars, on every dollar of taxable value (the Net Tax Digest). Multiply the result of “[A]/[B]” by 1,000 and you have…
5. …the MILLAGE RATE, which is the amount of tax, in dollars, on every $1,000 of taxable value [B] that is required to satisfy [A], the part of the budget to be funded by tax dollars.
When a taxing authority “does the math,” it collects no MORE and no LESS than required to fully fund the part of the budget to be covered by tax dollars.
Estimating Your Tax Bill
1. Find the assessed value of your property. It was on the notice that you received at the first of the year. For our example, let’s assume it is $200,000.
2. In Georgia, you are taxed on 40% of that value which, in our example, is $80,000 (200,000 times .40).
3. From that amount, you deduct any applicable exemptions (homestead, senior school, etc.). For our example, we’ll say that your total exemptions total $10,000.
4. Your taxable value is $70,000 or “70 thousands.” For our example, let’s say that the county adopted a millage rate of 14.000.
5. Multiply your taxable value in thousands (70) by the millage rate. 70 times 14.0 equals 980; in other words, your county property tax equals $980.
(You could also divide the millage rate by 1,000, then multiply your taxable value by it to get the same results– .0140 times 70,000)
6. In reality, your tax bill is made up of several different millage rates. The state charges .25 mills; you may have a city rate, a school millage, a fire district millage, etc. You will have to do the calculation for each millage, then add the totals to determine your tax bill.