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 Illinois, ad valorem taxes are primarily associated with real estate property taxes, which are based on the assessed value of the property. Illinois does not generally impose a state-level ad valorem tax on tangible personal property for businesses, such as goods in a warehouse, office furniture, or computer systems. Instead, the state abolished personal property taxes on corporations in 1979, and subsequently for individuals. However, local jurisdictions may have specific taxes that could apply to personal property used in a business context. It's important for businesses to check with local county tax assessors to determine if any such local taxes apply. Additionally, Illinois businesses are subject to other types of taxes, such as sales and use taxes, but these are not ad valorem taxes as they are not based on the assessed value of property.