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 New Jersey, ad valorem taxes are primarily associated with real property (real estate) rather than tangible personal property. The state does not impose a general ad valorem tax on tangible personal property for businesses. Instead, property taxes in New Jersey are levied on real property by local governments, such as counties, municipalities, and school districts. These taxes are based on the assessed value of the real property, which includes land and any permanent structures on it. Assessments are conducted by local tax assessors, and the tax rate is determined by the amount of revenue needed to fund local services. While some states do tax tangible personal property, New Jersey's tax system focuses on real property taxation, and businesses are not typically subject to ad valorem taxes on their tangible personal assets like office furniture or inventory within the state.