Certified Residential Appraiser Practice Exam

In tax assessments, what is the worth of a mill?

1. 1/500 dollar

2. 1/1,000 dollar

3. 1/10 dollar

4. 1/100 dollar

The correct answer is: 1/1,000 dollar

In the context of tax assessments, a "mill" is a unit of measurement used to express property tax rates. A mill represents one-tenth of a cent, or 1/1,000 of a dollar. This means that for every mill in the tax rate, property owners pay $1 in tax for every $1,000 of assessed property value. For example, if a property is assessed at $200,000 and the property tax rate is 25 mills, the tax owed would be calculated as follows: 1. Convert mills to dollars: 25 mills = 25/1000 = $0.025. 2. Calculate the tax: $0.025 x $200,000 = $5,000. Understanding this unit is critical for appraisers and property owners alike, as it directly impacts how much tax is owed based on the assessed value of a property. Therefore, recognizing that a mill is valued at 1/1,000 of a dollar is essential for accurately interpreting property tax rates.