What does the term "mills" represent in tax rates?

The term "mills" in tax rates refers to one-tenth of a cent, which is equivalent to 1/1,000 of a dollar. This unit of measurement is commonly used in property taxation to express the tax rate per thousand dollars of assessed value. For instance, if a property is assessed at $100,000 and the tax rate is 25 mills, this means the property owner would pay $25 in taxes.

Understanding this terminology is vital for real estate professionals as it helps them calculate taxes on properties and provide accurate estimates to clients. The use of mills allows for a straightforward way to communicate tax rates in relation to property values, making it easier for taxpayers to understand their obligations.