ad valorem (According-to-Value) Tax

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An ad valorem (According-to-Value) Tax is a tax that is based on an assessed monetary value.



References

2016

2015

  • http://www.investopedia.com/terms/a/advaloremtax.asp
    • QUOTE: An ad valorem tax is based on the assessed value of an item such as real estate or personal property. The most common ad valorem taxes are property taxes levied on real estate; however, ad valorem taxes may extend to a number of tax applications, such as import duty taxes on goods from abroad. Ad valorem property taxes are typically a major, if not the major, revenue source for both state and municipal governments, and municipal property ad valorem taxes are commonly referred to as simply “property taxes."

      The Latin phrase, ad valorem, means "according to value." In short, all ad valorem taxes are levied based on the determined value of the item being taxed. In the most common application of ad valorem taxes, municipal property taxes, the real estate of property owners is periodically assessed by a public tax assessor to determine its current value. The assessed value of the property is used to compute a tax annually levied on the property owner by a municipality or other government entity.
      Ad valorem taxes, which are based on ownership of a real asset, can be looked at in contrast to transactional taxes, such as sales taxes. While ad valorem taxes are determined and levied annually, transactional taxes are only levied at the time of a transaction.

2014