Ad Valorem

Business, Legal & Accounting Glossary

Definition: Ad Valorem


Quick Summary of Ad Valorem


In proportion to the estimated value of the goods or transaction concerned.




What is the dictionary definition of Ad Valorem?

Dictionary Definition


Latin: According To Value

Denotes a tax, duty or commission calculated as a percentage of the total invoice value of goods or services. VAT (Value Added Tax) is an Ad Valorem tax.


Full Definition of 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 places “caps” (maximums) on the percentage of the value (as under Proposition 13 in California) or “parcel taxes” which establish a flat rate per parcel.

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.


Examples of Ad Valorem in a sentence


Ad valorem duties are often levied on the basis of a product’s value.
An ad valorem tax is a tax based on the value of real estate or personal property.


Cite Term


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Ad Valorem. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. October 21, 2021 https://payrollheaven.com/define/ad-valorem/.
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Ad Valorem. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/ad-valorem/ (accessed: October 21, 2021).
American Psychological Association (APA):
Ad Valorem. PayrollHeaven.com. Retrieved October 21, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/ad-valorem/

Definition Sources


Definitions for Ad Valorem are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 8th October, 2021 | 18 Views.