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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 Washington State, ad valorem taxes are property taxes based on the assessed value of real and tangible personal property. The county assessor is responsible for valuing property within their jurisdiction at 100% of its true and fair market value, according to the Washington State Department of Revenue. This value is then used to calculate property taxes, which are levied by various taxing districts such as the state, counties, cities, and special districts. Tangible personal property used by businesses, such as furniture, fixtures, and equipment, is subject to personal property tax unless specifically exempted. Business owners must report their personal property annually to the county assessor for assessment purposes. The tax rate applied is a combination of the rates from the various taxing districts and is expressed in terms of dollars per thousand dollars of assessed value. It's important to note that inventory held for sale in the ordinary course of business is exempt from personal property tax in Washington State.

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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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Washington State Code

Washington State Code

Taxes

ad valorem tax

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