Committee hears step-by-step explanation of how North Dakota property taxes are calculated

BISMARCK — Members of the state House and Senate Finance and Taxation committees received an educational briefing detailing how North Dakota property taxes are calculated, including examples of how changes in taxable valuation affect mill levies and individual bills.

The presentation, given mainly by a tax practitioner identified as Linda Veil and by Shelley Myers, State Supervisor of Assessments, outlined the two-part calculation that drives property taxes: the dollars a political subdivision needs to fund its budget and the subdivision’s total taxable valuation. "The amount of tax to be levied and collected is calculated by dividing the dollars needed to fund a budget ... by the taxable valuation of that political subdivision," Veil said. She added that the resulting mill levy, when applied to a property's taxable value, "equates out to the tax bill."

Why this matters: The committee was shown how a single budget target produces different mill rates depending on the taxable valuation base. Presenters said that rising valuations can reduce mill rates but that local elected officials must still vote to set or lower levies. Committee members raised questions about whether and how legislative relief can be "backfilled" by local jurisdictions.

Most important facts

- Mill levy basics: Presenters explained that a mill equals one one‑thousandth of a dollar (0.001). The mill levy is the levy dollars divided by the taxable valuation and is typically expressed as mills per $1,000 of taxable value. Using the example in the briefing, an ABC County general fund needing $2,148,912 with estimated non‑tax revenues of $1,302,142 required an $888,770 levy; dividing that levy by the county's taxable valuation of $31,816,772 produced a 27.93 mill rate.

- How valuation classes work: Under North Dakota practice…