ad valorem tax

ad valorem tax
a tax levied according to the value of the property, merchandise, etc., being taxed.
[1690-1700]

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      any tax imposed on the basis of the monetary value of the taxed item. Literally the term means “according to value.” Traditionally, most customs and excises had “specific” rates; the tax base was defined in terms of physical units such as gallons, pounds, or individual items.

      Ad valorem rates, which have come into increased use, have the important advantage of adjusting the tax burden according to the amount the consumer spends on the taxed items. They thus avoid the serious discrimination of specific rates against the low-priced varieties of the commodities. The primary difficulty with the ad valorem taxation, especially in the case of tariffs, is in establishing a satisfactory value figure.

      Sales taxes of broad scope must of necessity have ad valorem rates. Property taxes (property tax) are sometimes considered ad valorem taxes, since the rates are applied to the value of the property, as distinguished from special assessments, which are frequently imposed on a specific unit (e.g., front footage) basis.

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Universalium. 2010.

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  • Ad valorem tax — An ad valorem tax (Latin: according to value ) is a tax based on the value of real estate or personal property.An ad valorem tax is typically imposed at the time of a transaction (a sales tax or value added tax (VAT)), but it may be imposed on an …   Wikipedia

  • ad valorem tax — /aed valorem/ According to value. A tax imposed on the value of property. The more common ad valorem tax is that imposed by states, counties, and cities on real estate. Ad valorem taxes, can, however, be imposed upon personal property; e.g., a… …   Black's law dictionary

  • ad valorem tax — /aed valorem/ According to value. A tax imposed on the value of property. The more common ad valorem tax is that imposed by states, counties, and cities on real estate. Ad valorem taxes, can, however, be imposed upon personal property; e.g., a… …   Black's law dictionary

  • ad valorem tax — n. A tax assessed on the value of property. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008. ad valorem tax A tax that is calculated according to value o …   Law dictionary

  • ad valorem tax — A type of tax calculated based on percentage of gross or stated value. For example, VAT. Bloomberg Financial Dictionary * * * ad valorem tax ad valorem tax ➔ tax1 …   Financial and business terms

  • ad valorem tax — tax which is added according to the worth of an item …   English contemporary dictionary

  • Ad Valorem Tax — A tax based on the assessed value of real estate or personal property. Ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenue for state and municipal governments. Municipal… …   Investment dictionary

  • ad valorem tax — An *indirect tax whose rate is based on a proportion of the *value of the item taxed. The Latin term ad valorem means in proportion to the value, and ad valorem principles are often used in property taxes and *customs duties …   Auditor's dictionary

  • ad valorem tax — noun a tax levied on the difference between a commodity s price before taxes and its cost of production • Syn: ↑VAT, ↑value added tax • Hypernyms: ↑excise, ↑excise tax * * * a tax levied according to the value of the property, merchandise, etc.,… …   Useful english dictionary

  • ad valorem tax — A tax of a fixed proportion of the value of the property to be charged, an appraisement being a prerequisite to the determination of the amount of the tax. 51 Am J1st Tax §26 …   Ballentine's law dictionary

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