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 Florida, ad valorem taxes are property taxes based on the assessed value of real estate property and tangible personal property. Each county has a property appraiser who assesses the value of tangible personal property used in a business annually. Business owners are required to file a Tangible Personal Property Tax Return (Form DR-405) with their county property appraiser by April 1st each year unless the value of their property is below the $25,000 exemption. The tax rate, or millage rate, is set by various taxing authorities, such as the county commission, school board, and city commission, and the tax is collected by the county tax collector. The revenue from ad valorem taxes is used to fund public services such as schools, roads, and emergency services. It's important for business owners to accurately report the value of their tangible personal property to ensure they are taxed appropriately. Failure to file the required return can result in penalties and an assessment made by the appraiser based on the best information available.
