A home in Jonesboro, Arkansas has a true market value of $280,000. Arkansas assesses real property at 20% of its true market value. The applicable millage rate is 50 mills. What is the annual property tax owed on this home?
Correct Answer
A) $2,800
Step 1 — Calculate assessed value: $280,000 × 20% = $56,000. Step 2 — Convert mills to a decimal rate: 50 mills = 50 ÷ 1,000 = 0.050. Step 3 — Calculate annual tax: $56,000 × 0.050 = $2,800. The annual property tax is $2,800. Arkansas's unique 20% assessment ratio is the critical step; skipping it produces an inflated result.
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