Colorado Sales License Practice Test

Property tax in Colorado is determined based on the assessed value of the property in conjunction with the applicable mill rates. The assessed value represents a percentage of the property's market value, which is established through periodic appraisals conducted by county assessors. Once this assessed value is determined, it is multiplied by the local mill levy, which is a tax rate expressed in mills (one mill is one-tenth of a cent). This combination of the assessed value and the mill rate ultimately yields the total property tax owed.

This method ensures that property taxes are proportional to the value of the property, making it a fair system for taxation. In contrast, options outlining methods such as assessing the age of the property, using a fixed rate set by the state, or only considering the physical size do not align with the structured approach of property taxation based on assessed values and mill rates. These alternative methods would not adequately reflect the true market value of properties or contribute to a fair assessment of property taxes.