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 Wisconsin, ad valorem taxes are primarily associated with real estate property taxes, which are based on the assessed value of the property. The state does not impose a state-level ad valorem tax on tangible personal property for general businesses. However, certain types of personal property, such as machinery, tools, and patterns used in manufacturing, were subject to personal property tax until the exemption that was phased in by 2018. Local municipalities have the authority to assess and collect property taxes, and the assessment is done on an annual basis. The local assessor determines the value of the property, and the tax is calculated based on the local tax rate. It's important to note that while general business personal property is exempt from ad valorem taxes in Wisconsin, there may be specific local regulations or exceptions that apply to certain types of tangible personal property. Business owners should consult with an attorney or their local assessor's office for detailed information regarding their specific tax obligations.