CALCULATING THE TAX RATE (MILL RATE)

Property is assessed in each town in Connecticut, as of the October 1st assessment day, based on 70% of the appraised value.  There are two classes of property subject to taxation:

• Real Property - which includes land and improvements that are permanently attached to land
• Personal Property - is all property not classified as real property.  It includes, but is not limited to, machinery,   equipment,   furniture, fixtures and  Motor Vehicles. Personal property owned by ALL business enterprizes and certain property owned by residents (such as horses and unregistered snowmobiles, motor vehicles etc.) is taxable in Connecticut.  See Personal Property Section.

Property tax rates are expressed in mills, or thousandths of a dollar.  For example, a property tax rate of  22.52 mills (.02252), when expressed in decimal fraction form) results in the payment of $22.52

for every $1,000 of taxable property's assessed value.

Property tax payments are calculated by multiplying  the net assessment by the mill rate. 

    APPRAISED VALUE  X 70% SALES RATIO-EXEMPTION =NET ASSESSMENT X  MILL RATE  =TAXES

         $600,000  x 70%  $420,000  = $420,000  x .02134=$8,962.80 2006 GRAND LIST

                                                           $420,000  x .02222=$9,332.40 2007 GRAND LIST

                                                           $420,000 x  .02252=$9,458.40 2008 GRAND LIST      

The property tax rate is calculated after all other anticipated revenue has been deducted from the total projected budget for the upcoming year.  The property tax rate, when multiplied by the net assessed value of all taxable property in the jurisdiction, will produce the revenue needed for all anticipated expenses, thus balancing the budget.

Two major tax categories that compose a town's total budget are general government and education.

Net Taxable Grand List is the total amount of property assessments on which taxes may be collected.  It is the gross Grand List less exemptions and adjustment.  Grand Levy is the amount of revenue that must be raised from property taxes.  The property tax rate (mill rate) is determined by dividing the Grand Levy by the Net Taxable Grand List.

This process is expressed by the following formula:   

    Grand Levy/Net Taxable Grand List   =    Tax Rate

STEPS IN THE BUDGET MAKING PROCESS ARE:

1    Submission of proposed budgets;

2    Calculation of estimates income from all sources;

                a.    Expenses:  All costs of government

                b.    Income:     All anticipated income from every source (federal and state grants,  etc)

3    Review, revision and approval of proposed budget and other anticipated expenditures;

4   Determination of the Net Taxable Grand List (i.e. total of gross assessments of all taxable property less all applicable property tax exemptions); and

5   Calculate Mill Rate

Example:

Total approved budget                                                                                                             $25,000,000

Less grants and miscellaneous income                                                                                           2,000,000  

Grand Levy (i.e balance needed from property taxes)                                                               $23,000,000

Grand Levy      $23,000,000 divided by $800,000,000 (Net taxable Grand List)= .02875 (28.75 Mill Rate)