Certified Pennsylvania Evaluator Practice Exam

What is the formula for Tax Assessment Measure (TAM)?

1. Market value / assessment x millage

2. Assessment / market value x tax rate

3. Taxes / assessment x millage

4. Market value x tax rate

The correct answer is: Taxes / assessment x millage

The Tax Assessment Measure (TAM) is used to understand how taxes are calculated based on property assessments. The correct formulation entails a relationship between the taxes, the assessment, and the millage rate. When calculating TAM, the key components involved are the taxes owed, the property’s assessed value, and the millage rate, which is a factor that determines how much tax is levied per $1,000 of assessed value. Thus, by taking the total taxes collected and dividing them by the assessed value before multiplying by the millage, you arrive at an understanding of the tax situation in relation to property assessments. This method correctly captures the essence of how tax assessments work by illustrating how the amount of taxes correlates with the assessment figure and millage. It effectively shows the proportionate measure of how taxes are distributed based on the assessed value of properties and the rates set by local governments. The formula involves using total taxes collected directly tied to the assessment, which helps gauge the impact of assessments on tax liabilities. This makes it pivotal to understanding tax assessments and their implications for property owners or evaluators within Pennsylvania and beyond.