Tax ratio is the difference between which values?

• A. Assessed Value
• B. Market Value
• C. Assessed and Market Value
• D. Tax Rate

Answer: (C)

In property taxation, the amount that is actually taxed is based on the assessed value, which is derived from the market value but not equal to it. The tax base is the assessed value, while the market value is what the property could fetch in an open market. The idea of a "tax ratio" here is about how much of the market value is reflected in the assessed value, i.e., the gap between them.

Therefore, the difference between market value and assessed value is what the item is asking about. This difference represents the portion of value that isn’t directly taxed as a full market value, while the assessed value (not the market value itself) is used to calculate the tax owed via the tax rate. Other options either refer to a single value (market value or assessed value) or to the tax rate itself, which isn’t about the difference between values.