Question

The Smith’s and the Jones are neighbors. They both have a tax rate of 28.5 mills. The Smith’s house is assessed at $80,000. The Jones’ house is assessed at $67,000. How much more do the Smith’s pay in property tax?

Answer 1

Given

Tax rate = 28.5 mills

Smith's house is accessed at $80,000

Jones's house is accessed at $67,000

Property taxes are calculated by multiplying the assessed, taxable property value by the mill rate and then dividing that sum by 1,000.

The formula is given by:

$Property\text{ tax levied on property = }\frac{mill\text{ rate }\times taxable\text{ property value}}{1000}$

Property tax for the Smith's:

$\begin{gathered} =\text{ }\frac{28.5\text{ }\times\text{ 80000}}{1000} \\ =\text{ 2280} \end{gathered}$

Property tax for the Jones':

$\begin{gathered} =\frac{28.5\text{ }\times\text{ 67000}}{1000} \\ =\text{ 1909.5} \end{gathered}$

The extra amount the Smith's pay is the difference in the tax levied on Smith and Jones:

$\begin{gathered} =\text{ 2280 - 1909.5} \\ =\text{ 370.5} \end{gathered}$

Hence, the Smith's pay $370.5 more than the Jones'