what is the difference of ad valorem and valorem?

Aliyuus2

1 year ago

The Latin phrase ad valorem means "according to value." Ad valorem taxes are levied based on the determined value of the item being taxed. Municipal property taxes are the most common application of ad valorem taxes.

Ad valorem is a Latin phrase that translates to “according to the value.” The essential characteristic of ad valorem tax is that it is proportional to the value of the underlying asset, unlike a specific tax, where the tax amount remains constant, irrespective of the underlying asset's value.