What is Tax Base?
Definition of Tax Base
The total taxable amount, be it revenue or asset, set by government is termed as “tax base”. This is the minimum amount, for example, of an income that is liable and subject to tax. In other terms we can put it as, taxable income is the tax base for income tax and assessed value is the tax base for property tax.
Explanation of Tax Base
Let’s suppose a Big Town has $5,000,000 commercial and residential real estate subjected to property tax. If local school district gets all of its funding from those property taxes, then its tax base is same i.e. $5,000,000.