Ad Valorem Taxes / Property Taxes

The "Ad Valorem" Tax or the Property Tax is based on value. The Property Tax is part of a well balanced revenue system that is designed to spread the tax burden to all citizens who benefit from the Government. Property taxes, along with collections of sales tax, licenses and permit fees, fines and forfeitures and charges for services, bring in the majority of the funds to operate the Rome/Floyd County Governments and School Systems.

Fair Market Value

The Fair Market Value of Real Property means the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm's length, bona fide sale. Said property must be exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with knowledge of all uses to which it is adapted and for which it is capable of being used.

The Fair Market Value of Personal Property, Georgia Law states, "With respect to the valuation of equipment, machinery, fixtures and inventories, Fair Market Value may be determined by resorting to any reasonable, relevant and useful information including, but not limited to, the original cost of the property, any depreciation or obsolescence, and any increase in value by reason of inflation".

Each Assessor shall have access to any public records of the taxpayer for the purpose of discovering such information. The Law further states, "In determining Fair Market Value of a going business where its continued operation is reasonably anticipated, the Assessors may value the equipment, machinery, fixtures and inventories which are the property of the business as a whole where appropriate to reflect the accurate Fair Market Value".

Value and Taxes

In Georgia, property is assessed at 40% of its appraised Fair Market Value. The ratio was established by the General Assembly and once multiplied with your Fair Market Value, determines your assessed value. The assessed value is multiplied with the tax rate to determine the amount of taxes due. Though the value of your property affects the amount of taxes you pay on it, the actual amount of taxes you pay is determined by the budgets needs of the city and county. In other words, the tax is based on the millage rate, which is determined by dividing the governments' and schools' budget needs by the assessed value of all the taxable property in the jurisdiction.

Tax Rate

The Assessors' Office has no control over the tax rate or amount of your taxes. The primary responsibility of the Assessors' Office is to appraise your property at its Fair Market Value so that you pay no more than your fair share of taxes. The amount of taxes you pay is determined by the tax rate or millage rate as it is commonly called. The tax rate is determined by all of the taxing agencies - State of Georgia, Floyd County Board of Commissioners, Floyd County Board of Education, Rome City Commissioners and Rome City Board of Education - and is determined by the budget needs to provide all the services citizens of Rome/Floyd County want and require.

Setting Tax Rate/Tax Calculation

The tax rate is established after the budget process by each taxing agency. As an aid to view the process, the following example illustrates how the amount of tax is determined through the budgeting process and how this relates to the millage rate and then to the individual tax bill:

Total Budget Needs as Determined by Each Taxing Authority ___________________$55,000,000
Assessed Value of all Taxable Property__________________________________$1,800,000,000
$55,000,000 divided by $1,800,000,000 = .0306
.0306 = Millage Rate or Tax Rate

The amount of revenue needed to fund the budget is divided by the total assessed value of all property - real and personal, public utilities, motor vehicles and mobile homes - to establish the millage rate or tax rate. The millage rate is calculated in dollars per 1,000. It is then applied to each individual assessed value to determine the amount of taxes.

Fair Market Value of Property___________________________________________$100,000
Georgia Assessment Rate (40%) _______________________________________x .40
Assessed Value_____________________________________________________$40,000
Millage Rate________________________________________________________x .0306

Property Taxes_____________________________________________________= $1,224.00

As property is reappraised each year, your tax bill may or may not change. Let's assume that all taxable property increases by 25% and that all taxing authorities have no increase in budget needs. The calculation would be as follows:
Total Budget Needs as Determined by Each Taxing Authority ___________________$55,000,000
Assessed Value of all Taxable Property with a 25% increase___________________$2,250,000,000
($1,800,000,000 x 1.25 )
$55,000,000 divided by $2,250,000,000 = .0244
.0244 = Millage Rate or Tax Rate
Fair Market Value of Property with a 25% increase____________________________$125,000
Georgia Assessment Rate (40%) _______________________________________x .40
Assessed Value_____________________________________________________$50,000
Millage Rate________________________________________________________x .0244

Property Taxes_____________________________________________________= $1,220.00

In the above examples, if a property owner has a Homestead Exemption, the exemption amount is deducted from the assessed value before the millage rate is applied.

Tax Collection

The Floyd County Tax Commissioner compiles the tax digest from the property values given by the Assessors' Office. The Tax Commissioner then multiplies each property assessment by the millage rate given by the taxing authorities - State of Georgia, Floyd County Board of Commissioners, Floyd County Board of Education, Rome City Commissioners and Rome City Board of Education - to determine the amount of tax. The Tax Commissioner mails the tax bills to the property owners and collects the taxes accordingly.