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 Connecticut, ad valorem taxes are applied to both real property (land and buildings) and tangible personal property. The tax is based on the assessed value of the property. For tangible personal property, businesses are required to report their property annually to the town's assessor on a Personal Property Declaration form. The local tax assessor then determines the property's value and assesses the tax based on the local mill rate. Each town or city in Connecticut sets its own mill rate, which is the amount of tax payable per dollar of the assessed value of the property. It's important for businesses to accurately report their tangible personal property to avoid penalties and ensure proper taxation. The state provides exemptions and tax relief programs for certain types of property and for eligible taxpayers, which can affect the overall tax liability.