What You Always Wanted to Know About Mills & Millage Rates
Millage rate. Mills. Quarter mill. Half mill. You hear these words continuously every summer as local governments set the tax rates that’ll decide how much property tax you’ll pay the following year. But what does a “mill” mean, and why on earth do local governments use terminology hardly anyone understands? (For a related definition of roll-back rates, go here.)
The millage rate in local government language is synonymous with the property tax rate. “Millage” is based on a Latin word that means “thousandth.” So 1 mill is equivalent to 1/1000th.
Applied to taxes, that means 1 mill is equivalent to $1 in taxes per $1,000 in taxable value. If your property has a taxable value of $100,000, and you’re assessed a 1 mill tax rate, you’ll pay $100 in taxes.
The standard way to figure your actual tax bill based on the millage rate is to take that rate, multiply it by the taxable value of your property, then divide the result by 1,000.
For example: If you live in Palm Coast and it’s 2011, you take all four major tax rates that will be levied that year: 3.5 mills by the city of Palm Coast, 6.055 by the county government, 8.013 by the school board, and 0.4158 by the St. Johns River Water Management District. Add them up. You get 17.9838.
That’s a combined rate of $17.9838 per $1,000 in taxable value.
Assume you have a house with an assessed value of $150,000—assessed by the Flagler County Property appraiser. The market value doesn’t matter. It could be higher, it could be lower. What matters is how the property appraiser assesses it. So let’s assume your house is assessed at $150,000, and you have a $50,000 homestead exemption. (As Toby Tobin notes in the comment below, correcting an earlier reference here to homesteading requirements, “the thought that homesteading requires more than six months of residency is a myth.” See the full comment.) The taxable value of your house is $100,000. That’s what you’re taxed on.
You then take the millage rate: 17.9838, multiply it by 100,000. You get 1,798,380. Divide that by 1,000 (because a mill is one thousandth of the value you’re working with). You get 1,798.38. That’s your tax bill: $1,798.38.
But not exactly. Tax calculations always have to be more complicated than a simple multiplication and division. The $50,000 homestead exemption applies to all tax rates. But when it comes to the school board, only $25,000 applies. So in reality, your city, county and water management tax bill will add up to $997.08, and your school board bill to $1,001.63, for a total of $1,998.71.
And to get even more technical, there’s the matter of the Florida Inland Navigation District and the East Flagler Mosquito Control District millage rates, the first of which applies to all property owners in Flagler, the second to most non-Palm Coast residents east of U.S. 1, including Bunnell. Those taxes are more larval than anything worth calculating.
So much for the technical story. What about the origins of the word? It won’t surprise those Americans who dislike taxes to discover that the word has, besides its Latin origin, a rich French heritage. There go those Socialists again.
In Latin, millsimum means “thousandth part.” It became millesme in Medieval French, which became millème, the still-in-use French for thousandth (as opposed to mille in French, which means thousand.)
The word “mill” in its American usage is short for millème. The earliest use of “mill” in the United States was not in reference to taxes, but to currency: In the late 18th century, and specifically by an act of Congress in 1789, the national currency was denominated into dollars, dimes, cents (or hundredth parts of dollars) and mills—thousandth parts of dollars, back when it was possible to buy goods worth cents and mills. Thomas Jefferson in 1791 wrote of buying a large set of dishes at 20 cents per pound, or 8 mills per dish.
Not that too many folks understood even that much. “Ask a tradesman,” John Quincy Adams wrote four years before becoming president, “in any of our cities what is a dime or a mille, and the chances are four in five that he will not understand your question.”
Reference to millage as a fraction of currency died out in the 19th century, but references to millage as a measure of taxes picked up, though chances are that less than one in a thousand taxpayer understands the millage system.
The word mill, of course, has dozens of other applications. There’s gin mills, cotton mills, paper mills, steel mills and all sorts of other mills that churned through cities and lives of industrial America. There are wind-mills, flour-mills and grist-mills. There’s mill-seed. There’s even an old reference to a mill as a thief or housebreaker, just as the word “mills” was used to refer to tools used by robbers to break into houses. There’s also the mill, probably derived from mull, as the powdered bark of oak trees, which is used in the tanning process. And if you’re part of the rest of the world that uses the logical metric system, there’s mill or mil as short for millimeter.
There are other usages, but none so explosive as the Mills grenade, the standard hand-grenade used by the British army in World War I. Also, what contemporary tea party activists want to lob at any mention of millage as applied to their property taxes.