Property Taxes

[courtneyronald]

Perez, Inc., is headquartered in an area in which assessed valuation is 80% of market value. The tax rate this year is $1.40 on each $100 of assessed valuation. Its property has a market value of $320,000. How much property tax will Perez pay this year? I don't understand this question at all!!! Please help!!!!

 

[mmm4444bot]

I don't understand this question at all ? This declaration is too vague for me to determine why you're stuck.


Market value is the dollar amount that an owner expects to get from selling their property.

Assessed value is the dollar amount that the government thinks the property is worth for tax purposes.

In this exercise, the government says that property is worth only 80% of what owners think, and they calculate the tax based on this reduced value.

EG:

I do research and then decide that my car would sell for $5,000. Hence, the market value is $5,000.

The state charges excise tax on my car. The state does not want to argue over individual car values, so they decide to reduce all values to 75% of market value. This way, no one can claim that the state overcharges.

In other words, the state assesses the value of my car at only $3,750 (this is 75% of $5,000).

The state's excise-tax RATE is $18 for each $1,000 of assessed value.

3750/1000 = 3.75

(3.75)(18) = 67.5

The excise tax on my car is $67.50


Your exercise deals with a similar scenario.

The market value is $320,000

The assessed value is reduced to 80%

For every $100 of assessed value, Perez Incorporated must pay $1.40


In future requests for help on these boards, please be specific about where you are stuck and what you already understand. Otherwise, we have to guess.

Cheers ~ Mark