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Determining of property tax rate The county legislature approved the budget for 2019. Revenues from property taxes...

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Accounting

Determining of property tax rate

The county legislature approved the budget for 2019. Revenuesfrom property taxes are budgeted at $800,000. According to thecounty assessor, the assessed valuation of all of the property inthe county is $50 million. Of this amount, property worth $10million belongs to the federal government or to religiousorganizations and, therefore, is not subject to property taxes. Inaddition, certificates for the following exemptions have beenfiled:

Homestead$2,500,000
Veterans1,000,000
Old age, blindness, etc.500,000

In the past, uncollectible property taxes averaged about 3percent of the levy. This rate is not expected to change in theforeseeable future. Using all of this information,determine  

a. the property tax rate per $1,000 of assessed valuations thatmust be used to collect the desired revenues from propertytaxes.  

Round answer to two decimal places.

$Answer

b. the levy on a piece of property that was assessed for$100,000 (after exemptions).

Use rounded answer from above. Round final answer to the nearestwhole number.

Answer & Explanation Solved by verified expert
4.2 Ratings (927 Votes)

a) The Property tax rate for the desired rate of taxes is calculated as below:

Particulars                                            Amount

Amount to be collected                       $800000

Estimated uncollectible Prop Taxes     3%

Required tax levy $800000/.97             $824742.27

Total assessed value                            $50000000

Less Property not taxable                    $10000000

                                                            $40000000

Less exemptions                                 $2500000

Homestead                                          $2500000

Veterans                                              $1000000

Old age ,blindness                              $500000

Net assessed value                             $36000000

Tax Rate =required tax levy /net assessed value of property is 2.29%

ie $22.91 per $1000 of assessed valuation.

b.The property that is assessed for $100000 would be levied at the tax rate of 2.29%

     ie $2291
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