ad valorem

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Ad Valorem

According to value.

The term ad valorem is derived from the Latin ad valentiam, meaning "to the value." It is commonly applied to a tax imposed on the value of property. Real property taxes that are imposed by the states, counties, and cities are the most common type of ad valorem taxes. ad valorem taxes can, however, be imposed upon Personal Property. For example, a motor vehicle tax may be imposed upon personal property such as an automobile.

An article of commerce may be subjected to an ad valorem tax in proportion to its value, which is determined by assessment or appraisal.

Duties, taxes on goods imported or brought into this country from a foreign country, are either ad valorem or specific. An ad valorem duty is one in the form of a percentage on the value of the property, unlike a specific duty that is a fixed sum imposed on each article of a class, such as all Swiss wristwatches, regardless of their individual values.

Cross-references

Taxation.

ad valorem

adj. Latin for "based on value," which applies to property taxes based on a percentage of the county's assessment of the property's value. The assessed value is the standard basis for local real property taxes, although some place "caps" (maximums) on the percentage of value (as under Proposition 13 in California) or "parcel taxes" which establish a flat rate per parcel.

ad valorem

adjective according to value, appraised, appraisement, assessable, assessment, charge, chargeable, charged, dutiable, duty, evaluated, excisable, imposition, leviable, levy, ratable, taxation, valorization, value added tax, valued at
Associated concepts: ad valorem tax

ad valorem

‘according to the value’, often used in the context of taxes and duties.

AD VALOREM. According to the value. This Latin term is used in commerce in reference to certain duties, called ad valorem duties, which are levied on commodities at certain rates per centum on their value. See Duties; Imposts; Act of Cong. of March 2, 1799, s. 61 of March 1, 1823 s. 5.

References in periodicals archive ?
f (a + [Alpha] - c) + e(b + d)]/(b + d + f); the optimal ex post ad valorem tax rate equals the ratio of marginal external damage to consumer price G([Q.
i], which in turn denotes the quantity traded under a quota (i = q), specific tax (i = s) or ad valorem tax (i = a).
When an ad valorem tax is imposed, equilibrium market output is [(a + [Alpha])(1 - t) - c]/[b(1 - t) + d].
Several points about the optimal ad valorem tax policy deserve further discussion.
Proposition 2: For a regulated monopolist the ad valorem tax generates more revenue than the unit tax at a given output if the marginal product of labor at that output under the ad valorem tax is greater than or equal to the marginal product of labor under the unit tax.
The first case assumes that the marginal product of labor under the ad valorem tax ([Mathematical Expression Omitted]) on an isoquant equals the marginal product of labor under a per unit tax ([Mathematical Expression Omitted]).
It is evident that tax revenues generated under the ad valorem tax ([TR.
In general, the larger the ad valorem tax rate (v), the larger the marginal product of labor under the unit tax ([Mathematical Expression Omitted]), the smaller the absolute value of [Epsilon] and the smaller marginal revenue or output are, the more likely it is that the Suits-Musgrave result will hold.
j], the optimum ad valorem tax rate on commodity i must be the same as that on commodity j.
An equiproportional ad valorem tax between a pair of commodities i and j is optimum if the sum of the price elasticities of both demand and supply equals their product.
Since an ad valorem tax on gross demand prices is often practiced, it is appropriate to calculate the optimum tax ratios so that the excess burden is minimized.
In this paper, we prove that the Ramsey optimum taxation rule under the demand ad valorem tax is exactly the same as that under the supply ad valorem tax proved by Ramsey in 1927.