DATA REPORT

Commercial Property Tax Rates by State

A 2026 comparison of commercial property tax burdens across Michigan, Ohio, and Indiana — and why the headline number on the rate chart almost never matches your bill.

Owners and brokers love asking which state has the highest commercial property tax rate. It is the wrong question. The headline rate hides three different assessment ratios, two constitutional caps, dozens of voter-approved millage layers, and a thicket of abatements — none of which are visible on a national ranking chart. What actually matters is the effective tax rate (ETR): the total annual tax divided by the property's market value. That is the only number you can compare across Michigan, Ohio, and Indiana — and even ETR has caveats.

We built this page as a reference for owners, brokers, and attorneys who need a real comparison rather than a Lincoln Institute footnote. The Lincoln Institute 50-State Property Tax Comparison Study remains the gold-standard data source, but its averages flatten the city-to-city variance that decides whether a deal pencils. If you want a primer on the underlying valuation mechanics before reading the comparison, our commercial property tax assessment guide walks through cap rate, equalization, and assessment ratio in plain language.

STATE-BY-STATE CHEAT SHEET

How MI, OH, and IN cap commercial taxes

Each state limits commercial tax growth differently. The mechanism — not the headline rate — is what drives your annual bill.

Michigan Proposal A: taxable value can rise no faster than 5% or CPI annually — until the property sells.

Michigan uncapping: a sale resets taxable value to State Equalized Value, often a double-digit jump.

Ohio: assessed value = 35% of market value, then voted millage, plus inside millage, plus HB920.

Ohio HB920 reduction factors: voted millage gets rolled back so total revenue stays roughly flat.

Indiana 3% circuit breaker: commercial tax bill is capped at 3% of gross assessed value, full stop.

Indiana DLGF cost manual: the state sets the cost tables — county assessors only adjust at the margin.

The Effective Tax Rate Is the Only Honest Comparison

The effective tax rate is straightforward: total annual property tax paid, divided by the property's market value. A $5 million Detroit office that pays $145,000 a year carries a 2.9% ETR. A $5 million Indianapolis office that pays $135,000 carries a 2.7% ETR — even though Indiana's headline cap is 3% and Michigan has no commercial cap at all. The ETR collapses assessment ratio, millage, equalization, abatements, and Michigan uncapping into a single number you can actually use.

Commercial ETRs almost always exceed residential ETRs in the same jurisdiction. In Michigan, homestead millage exempts owner-occupied homes from school operating millage; commercial property pays every layer. In Ohio, residential property gets the 10% rollback and 2.5% owner-occupancy credit that commercial does not. In Indiana, the circuit breaker cap is 1% for homesteads and 3% for commercial — a structural 3:1 difference baked into the constitution. The Lincoln Institute's 50-state report consistently shows the largest U.S. cities have commercial ETRs that run 2–3x the residential rate. That gap is the entire reason commercial appeals exist as a practice area, and our assessment guide walks through how the gap gets baked in at valuation time.

METHODOLOGY

Why Headline Rates Lie

Rate-ranking articles compress every state into one number. Five things that number ignores — and that your tax bill does not.

01Different assessment ratios: Ohio assesses at 35% of market value, Michigan at 50%, Indiana at 100% — so a 'comparable' millage rate produces wildly different ETRs.

02Caps and circuit breakers truncate the bill: Indiana's 3% commercial cap and Michigan's Proposal A growth limit blunt the headline rate's bite.

03Inside vs. voted millage and Ohio's HB920 reduction factors hide what the local school district is actually collecting from commercial parcels.

04Special assessments, BIDs, and TIF districts ride on top of the published rate and never appear in state-level rankings.

05Abatements, PILOTs, and enterprise-zone deals distort published commercial averages — a Class-A office in an abatement zone pays a fraction of the headline ETR.

The Three EPTA States, in Plain Numbers

Michigan. The Lincoln Institute typically places Detroit in the top five U.S. cities for highest commercial ETR — often above 3%. Highland Park and several enclaves inside Wayne County run higher still. Ann Arbor and the Oakland County suburbs sit meaningfully lower because the millage stack is shorter and the tax base is broader. The dynamic that catches owners off guard is Proposal A: the cap looks generous on paper, but a single sale uncaps the property and snaps the taxable value to State Equalized Value. Per michigan.gov/treasury, that mechanic — not the headline millage — is what owners actually feel.

Ohio. The 35% assessment ratio means a $5M office is on the rolls at $1.75M. From there, voted millage and inside millage stack on top, but HB920 reduction factors roll the voted portion back so total revenue stays roughly flat between reappraisals. The practical result: the headline millage rate in Cuyahoga County looks higher than its actual commercial ETR, because HB920 has been quietly compressing the voted layer for years. The Ohio Department of Taxation property tax research portal publishes the underlying rate tables.

Indiana. The 3% commercial circuit breaker means the worst-case ETR is 3% of gross assessed value. Industrial-heavy Lake County hits the cap routinely; Hamilton County's newer commercial base often runs below it. Indiana's Department of Local Government Finance sets the assessment manual centrally, which makes inter-county comparisons in IN cleaner than in MI or OH — but only if the county assessor is applying the manual correctly, which is exactly where appeals live.

WHAT THE RATE MEANS

The rate doesn't decide — the action does

Two owners can sit in the same county at the same headline rate and pay wildly different effective taxes. The variable is what they do about it.

Owners Who Use the ETR Lens

Model the effective tax rate including abatements, caps, and HB920 — not just the millage.

Pull comparable assessments from neighboring parcels before each tax year.

File a Board of Review, BOR, or PTABOA appeal whenever assessed value drifts above market.

Track Proposal A uncapping and circuit-breaker movement after every transaction.

Use a free EPTA review to benchmark their ETR against the service area.

Owners Who Trust the Headline Rate

Pay whatever the published rate produces, year after year.

Treat Lincoln Institute averages as immutable rather than as a starting point.

Ignore the millage breakdown on the bill — and miss recoupable special assessments.

Let an uncapping event or trending update walk through unchallenged.

Discover the over-assessment only when the property goes to market.

METHODOLOGY & SOURCES

Where this data comes from

This page is a working comparison rather than a static study. Effective-rate figures cited above are reconciled against four authoritative sources, then verified against the actual assessment notices we see on EPTA's engagement files. We update it whenever a state DOR releases a new rate report or the Lincoln Institute publishes a new edition.

If you are citing it back, the four anchor sources are listed below. Use them, link them, and treat them as the floor — the ceiling is your own assessment record.

Lincoln Institute of Land Policy 50-State Property Tax Comparison Study (annual)

Michigan Department of Treasury — local property tax statistics

Ohio Department of Taxation — researcher property tax tables

Indiana Department of Local Government Finance — gross AV and circuit-breaker data

For the EPTA-specific calendar that pairs with this rate data, see our property tax deadlines resource, and read the Lincoln Institute report in full for the underlying methodology.

Two commercial property owners comparing tax rate data across states

The effective tax rate (ETR) is the total annual property tax bill divided by the property's market value, expressed as a percentage. A $5 million property paying $125,000 a year has a 2.5% ETR. ETR is the only metric that lets you compare Michigan, Ohio, and Indiana cleanly, because it absorbs assessment ratio, millage, caps, and equalization into one number. Headline millage rates do not — Ohio's nominal rates look high precisely because Ohio assesses at 35%, not 100%. For the underlying mechanics, see our commercial property tax assessment guide.

Detroit has historically ranked among the top five U.S. cities for highest commercial effective tax rate, regularly clearing 3% in Lincoln Institute studies. Highland Park and several enclaves inside Wayne County run higher still, while Ann Arbor and the Oakland County suburbs sit meaningfully lower because the millage stack is shorter. The trap most owners hit is not the millage itself — it is Proposal A uncapping after a sale, which can re-base taxable value overnight. If your taxable value just jumped, your ETR did too.

Not exactly. HB920 reduction factors roll back voted millage so that total district revenue from existing parcels stays roughly flat between reappraisals — but inside millage and newly voted levies still flow through, and triennial updates reset the baseline. The practical result for commercial owners in Ohio is that the published millage looks scarier than the effective bill, but you are not insulated from increases — you are insulated only from the voted-millage portion of the reappraisal. The fix when your value runs ahead of market is a complaint at the Ohio Board of Revision.

Indiana's constitutional circuit breaker caps commercial property tax at 3% of gross assessed value. That sounds protective, and it is — but the cap applies to the assessed value, not the market value. If your Indiana property is over-assessed, the cap simply limits damage at a higher floor. A property assessed at $5M pays up to $150,000; a true $3.5M value would cap at $105,000. The whole point of understanding Indiana's tax caps is realising that they do not replace an assessment appeal — they make the appeal more valuable.

Because each state starts from a different assessment ratio. Ohio assesses at 35% of market value, Michigan at 50% (State Equalized Value, with a Proposal A taxable-value layer on top), and Indiana at 100%. A 60-mill rate in Ohio is not the same as a 60-mill rate in Indiana — the Ohio property pays 60 mills on 35 cents of every market dollar, the Indiana property pays it on the full dollar. Add caps, HB920, and abatements and the comparison only gets messier. The cleanest apples-to-apples is ETR, but even ETR distorts when one state has heavy abatement use. Our how assessors value commercial property resource walks through the ratio mechanics.

Four sources do most of the heavy lifting. The Lincoln Institute 50-State Property Tax Comparison Study is the cross-state benchmark. For state-specific commercial data, go to michigan.gov/treasury, tax.ohio.gov, and the Indiana DLGF. Pair them with our property tax deadlines reference so you know when each state's rate data is refreshed.

Yes — but not by lowering the rate. Millage is set by voters, school boards, and local councils, and a single property owner cannot move it. What you can move is the assessment your rate is applied against. If your assessed value exceeds market value, an appeal at the local Board of Review, BOR, or PTABOA will reduce the base — and the same millage on a smaller base produces a smaller bill. That is how every commercial appeal we run works. Start with a free assessment review to find out if your property is over-assessed, and read our property tax appeal process guide for what comes next.

LOWER THE BASE, NOT THE RATE

Your tax bill isn't the rate — it's the assessment.

We can't change Michigan's millage stack, Ohio's HB920 math, or Indiana's 3% cap. We can change what your property is assessed at — which is the only lever that actually moves the bill.

EPTA represents commercial owners across Michigan, Ohio, and Indiana on contingency. No fee unless we reduce your taxes.

Free, no-obligation assessment review for commercial owners in MI, OH, and IN.

State capitol building representing property tax rate authority