The amount of tax each property pays is based on a property’s valuation and classification. Another very important factor that affects how much tax each property pays is the budgeting decisions made by each taxing jurisdiction.
For example, only the necessary amount of property tax is collected to meet the budgets set by the county, towns, cities, school districts, and special taxing districts. These budget decisions determine the tax rates. Tax rates are determined for each taxing authority.
Property's Net Tax Capacity
A property’s taxable market value times its classification rate is the property’s net tax capacity:
Taxable Market Value x Classification Rate = Net Tax Capacity
The net tax capacity times the tax rate(s) is the property’s net taxes:
Net Tax Capacity x Tax Rate = Net Taxes
Other Calculations & Factors
There are many other calculations or factors (for example, state taxes, referendum taxes, and tax credits) that will affect a property’s final tax bill. The above only illustrates the tax rate’s role in the calculation. To find out a property’s actual tax bill, use the county’s property tax information system.
A property that has the exact same taxable market value and same classification rate that is located in the same taxing jurisdiction should have the same property tax amount (unless there are special assessments or one property qualifies for property tax credits like homestead or other special programs). If those two properties are located in different taxing jurisdictions, they will likely have different property tax amounts due to different tax rates set by the jurisdictions.
For example, if Property A has a tax rate of 50% and Property B has a tax rate of 100%, the taxes for Property A should be about half of the property taxes for Property B. This is because of the effect of the tax rate.