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 Texas, ad valorem taxes, also known as property taxes, are levied on both real estate and tangible personal property. The tax is based on the assessed value of the property. County tax assessors appraise the value of a business's tangible personal property, such as goods in a warehouse, office furniture, computer and telephone systems, and inventory, annually. The tax rates are set by local taxing units, which may include counties, cities, school districts, and special districts. Business owners are required to report their tangible personal property to the county appraisal district using a rendition form by April 15 each year. Failure to comply can result in penalties. The revenue from ad valorem taxes is used to fund local services such as schools, roads, and emergency services. It's important for businesses to maintain accurate records of their tangible personal property to ensure proper assessment and compliance with Texas tax laws.
