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 Louisiana (LA), ad valorem taxes, also known as property taxes, are applied to both real estate and tangible personal property. The local government assesses these taxes based on the fair market value of the property. For businesses, this includes items such as office equipment, inventory, furniture, and other physical assets used in the operation of the business. The local parish tax assessor is responsible for determining the value of tangible personal property for tax purposes annually. The assessed value is then multiplied by the millage rate, which is set by various taxing authorities within the parish, to determine the amount of tax owed. Business owners are required to report their tangible personal property to the assessor's office for assessment. Louisiana law provides for various exemptions and tax relief programs that may reduce the ad valorem tax liability for qualifying property owners.