AD VALOREM TAX Meaning and
Definition
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An ad valorem tax refers to a type of tax that is calculated based on the assessed value of a property or the value of a transaction or importation. The term "ad valorem" is derived from Latin, meaning "according to value," which precisely underscores the basis on which this tax is levied.
For properties, an ad valorem tax is imposed by local governments or municipalities and is typically applied to real estate, land, or personal property. The tax is determined by assessing the fair market value of the property, often by a licensed assessor. The rate at which the tax is ultimately calculated and collected is usually a percentage set by the governing body, such as a city council or county government.
Regarding transactions or importations, an ad valorem tax is imposed on the value of the goods or services being traded or imported. This tax is commonly applied to goods such as automobiles, luxury items, and imported goods. The value of the goods or services is determined based on their market price or their declared value.
The revenue generated from ad valorem taxes is typically used to fund public services, infrastructure projects, education, or other expenditures deemed necessary for the local or national government. This type of tax can be seen as a way to distribute the burden of taxation more equitably, as those with higher-valued property or engaging in more valuable transactions will pay a proportionately higher tax amount.
Common Misspellings for AD VALOREM TAX
- zd valorem tax
- sd valorem tax
- wd valorem tax
- qd valorem tax
- as valorem tax
- ax valorem tax
- ac valorem tax
- af valorem tax
- ar valorem tax
- ae valorem tax
- ad calorem tax
- ad balorem tax
- ad galorem tax
- ad falorem tax
- ad vzlorem tax
- ad vslorem tax
- ad vwlorem tax
- ad vqlorem tax
- ad vakorem tax
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