How Are Levy Rates Calculated?

Property Tax Limitations

The Simple Levy Process*

There are two key players in the levy process:

  1. Taxpayers (You, me, ABC Company, Yummy Café, etc.)
  2. Taxing Districts: (Fire Districts, Schools, Ports, Cities, Counties, etc.)

The levy process needs to know specific data from each player:

  1. Taxpayer: The value of their parcels.
  2. Taxing Districts: Their budget.

Calculation: the amount of money needed by the taxing districts budget is divided by the value of all the taxpayers’ parcels in the district, which equals the tax rate for the district.  For example, if the taxing district’s budget is $87,500 and the value of the district is $121,000,000:

District Budget                      $87,500
/Valuation                              /$121,000,000
Taxing District Rate =          $0.723140 (0.00072314049 multiplied by 1,000 per AV)

A unique mix of one or more Taxing Districts (and their specific rates) make up the total Tax Code Area (TCA) and total rate that the taxpayer will pay against their property value for their property taxes. 

*Note: The Simple Levy Process provides a general overview of calculating levies.  The real levy process involves many additional components with much greater detail.