Question

Consider the following taxes:
1. Sales tax

2. Value-added tax

3. Property tax
Which of the taxes given above are Ad valorem tax/taxes?

• A. 1 and 2
• B. 1 and 3
• C. 2 and 3
• D. All of those

Answer 1

The correct option is D All of those

An ad valorem tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ad valorem tax may also be imposed annually, as in the case of a real or personal property tax, or in connection with another significant event (e.g. inheritance tax, expatriation tax, or tariff).