To arrive at the amount of property taxes a taxpayer owes, the Auditor multiples the property's assessed value by the total mill rate, and divides by 1,000. Expressed as an equation, the process looks something like this:
Fair Market Value × 35% = Assessed Value
Example: A home with a fair market value of $100,000 would have an assessed value of $35,000 ($100,000 × 0.35).
(Assessed Value × Mill Rate) ÷ 1000 = Base Property Tax
Example: A home with a fair market value of $100,000 and an assessed value of $35,000 is subject to three property tax millages - the base rate of 10 mills, 10 mills of school taxes, and 10 mills of road taxes - for a total mill rate of 30 mills. Using the formula, the taxpayer owes a base property tax of $1,050 ($35,000 × 30) ÷ 1000 = $1,050.
Base Property Tax + Special Assessments = Total Property Tax
In addition to the base property tax, taxpayers may also be subject to special assessments. A special assessment is a property tax that can be added for certain special projects, like installing water lines, sewer lines, and stormwater runoff systems. The base property tax, and any additional special assessments, form the total property tax:
Total Property Tax - Reduction Credits = Property Tax Owed
The total property tax amount can be reduced by reduction credits, such as the Homestead Exemption program that is administrated by the Auditor's office.