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ad valorem tax

An ad valorem tax is a tax that is calculated as a percentage of the value of something—such as tangible (physical) personal property (goods in a warehouse, office furniture, computer and telephone systems, inventory, etc.).

For example, county tax assessors often place a value on a business's tangible personal property and assess an ad valorem tax on the property.

In Arkansas, ad valorem taxes, also known as property taxes, are applied to both real property (land and buildings) and tangible personal property (items such as office equipment, inventory, machinery, etc.). The county tax assessors are responsible for assessing the value of tangible personal property owned by businesses each year. The assessed value is typically a percentage of the property's fair market value. The specific percentage used for the assessment can vary by county. Once the value is determined, the ad valorem tax is calculated by applying the appropriate millage rate, which is the amount of tax payable per thousand dollars of the assessed value. These taxes are used to fund local services such as schools, roads, and emergency services. It's important for businesses to report their tangible personal property annually to the county assessor's office to ensure accurate taxation. Failure to do so can result in penalties. The exact rates and exemptions can vary, so businesses should consult with an attorney or the local assessor's office for specific guidance.

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Demystifying Ad Valorem Tax: What You Need to Know

In the confusing world of taxation, one term often whispered with both curiosity and confusion is "ad valorem tax." It's not your everyday tax, and understanding it is essential in today's financial landscape.

Taxes

ad valorem tax

As a LegalFix Member You Will Be an Important Client of Local Law Firms

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Arkansas State Code

Arkansas State Code

Taxes

ad valorem tax

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