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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 Maryland, ad valorem taxes are applied to both real property (land and buildings) and tangible personal property. The state itself does not levy personal property taxes, but local jurisdictions such as counties and municipalities do. Businesses in Maryland are subject to local ad valorem taxes on their tangible personal property, which includes items like office furniture, computer systems, and inventory. The tax is calculated based on the assessed value of the property. Each county in Maryland has its own tax rates and assessment procedures, and the value is typically determined by the county tax assessor. Business owners are required to file personal property returns annually with the Maryland Department of Assessments and Taxation, which provides the information to local jurisdictions for tax assessment purposes. It's important for businesses to keep accurate records of their tangible personal property to ensure proper assessment and taxation.

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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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Maryland State Code

Maryland State Code

Taxes

ad valorem tax

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