In our last story, we discussed the constitutional requirements of Ohio’s property tax system. As you remember, all land must be valued at its true value in money, except for property that can be valued using the Current Agricultural Use Value (CAUV) formula. Once the value of the property is established, the taxable value can be determined.

Tax rates can also be a source of confusion. In Ohio, property tax rates are expressed in terms of millage. One mill is equal to 1/1,000 of a dollar or $0.001. When reviewing your tax bill, you will see the tax rate expressed as a number, such as “75.55.” To determine what your taxes are from this rate, you would actually multiply the taxable value (appraised value x .35) by 0.07555.

There are two types of millage under Ohio’s property tax system: the so-called “inside mills” and “outside” or voted millage. Inside millage is so named because it is inside the purview of the Ohio Constitution to charge this amount on the tax bill. The Ohio Constitution states that property taxes shall be assessed at no more than 1 percent of value, unless otherwise approved by the electorate or provided for in a city charter. This means that the Ohio Constitution allows for the first 10 mills (or 1 percent) of property taxes on your tax bill without any prior approval or restrictions. These inside mills are distributed generally among your local governments.

“Outside” millage, or voted millage, is just that — millage that had to be approved by the voters before it could be applied to the tax bill. Any levies or bond issues that you have seen presented on your ballot, if approved, are part of the outside millage on your tax bill. This distinction will be additionally important when we discuss the House Bill 920 reduction factors that limit tax rates.

Leah Curtis is Ohio Farm Bureau’s director of agricultural law.

Note: The attached Heat Map graphic is the average gross tax millage rates on residential and agricultural properties, by county, for taxes collected for 2013. OFBF graphic based on data from the Ohio Department of Taxation. The statewide average is 91.71.

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