A specific parcel of real estate has a market value of $180,000 and is assessed for tax purposes at 35 percent of market value. The tax rate for the county in which the property is located is 30 mills. The annual tax bill will be?

• A. $1,890
• B. $1,800
• C. $1,950
• D. $2,100

Answer: (A)

Taxes are based on the assessed value, not the full market value. The assessed value here is 35% of 180,000, which equals 63,000. Mills represent the tax rate per dollar of assessed value, and 30 mills means $0.030 per $1 of assessed value (or $30 per $1,000). So the annual tax is 63,000 × 0.030 = 1,890. Therefore, the tax bill is $1,890. If you used the full market value instead, you’d get 180,000 × 0.030 = 5,400, which isn’t correct for this assessed-rate scenario. The crucial steps are applying the assessment percentage first, then the mill rate.