Definition of 'Mill Rate'
The amount of tax payable per dollar of the assessed value of a property. The mill rate is based on "mills"; as each mill is one-thousandth of a currency unit, one mill is equivalent to one-tenth of a cent or $0.001. Property tax in dollar terms is calculated by multiplying the assessed property value and the mill rate and dividing by 1,000. As a property may be subject to tax by a number of different authorities, mill rates are set by each taxing authority so as to meet the revenue projections in their budgets.
Investopedia explains 'Mill Rate'
For a given jurisdiction, mill rates may depend on the classification of property, whether it is residential, commercial, industrial, agricultural and so on.
As an example of using the mill rate to calculate the dollar amount of property tax payable, consider a property with an assessed value of $300,000 that is located in a jurisdiction with a mill rate of 15. The property tax levied would therefore be $4,500.