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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 Massachusetts, ad valorem taxes are primarily associated with real estate and personal property tax. The local municipalities assess these taxes based on the value of the property. For tangible personal property owned by businesses, such as equipment, furniture, and inventory, the local tax assessor determines the value of these items annually and levies a tax accordingly. The tax rate varies by municipality and is applied as a percentage of the assessed value. Certain items may be exempt from personal property tax, and there are provisions for small business exemptions under Massachusetts General Laws Chapter 59, Section 5, Sixteenth (3). It's important for businesses to accurately report their tangible assets to the local assessor's office to ensure proper taxation. If a business disagrees with the assessed value, they may have the right to appeal the assessment with the local Board of Assessors or the Appellate Tax Board.

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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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Massachusetts State Code

Taxes

ad valorem tax

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