AD Valorem Tax (Huntsville, Madison: 2014, vehicle registration, house)

[Tennhioland]

OK, just moved here a few months ago. What is an AD Valorem tax and how often do I have to pay this? Got a new car registered here and I sure hope that tax isn't annual!

[Reactionary]

Alabama's ad valorem ("according to value") tax is an annual property tax on vehicles, collected when your vehicle tag is obtained / renewed. Note that as your new car depreciates, the tax decreases.

Ad valorem tax is a property tax, not a use tax, and follows the property from owner to owner. Therefore, unlike registration fees, taxes accumulate even when a vehicle is not used on the highway.

Alabama Department of Revenue - Property Tax

Alabama law outlines four classes of property for Ad Valorem tax purposes, three of which apply to motor vehicles. The yearly Ad Valorem, or Property Tax, is based on the values assigned by the State of Alabama Department of Revenue.

License Department - Tags

Lots of good info at the Madison County site.

[MisterEd51]

You paid that tax when you registered your car and got a tag for it. The month you pay this is based on your last name. This is paid every year. Hopefully as the value of your car goes down so should the Ad Valorem Tax.

For example on my car vehicle registration tag and tax receipt are the following:
Assessed Value = $2700 *
Ad Valorem Tax Calculations
State = $ 47.25
County = $ 35.10
School = $ 74.25
Total = $156.60

* Assessed Value Calculations
Appraised value = $18000
Assessed Value $18000 x 15% = $2700

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Here is what all that means...

To calculate the assessed value for a motor vehicle, multiply the market value by the appropriate assessment and the applicable millage rate.
Class IV Motor Vehicles = 15% (cars, SUVs and pickups)

Ad valorem taxes on motor vehicles are assessed and collected forward on a current basis to coincide with the collection of motor vehicle registration fees.

Ad valorem tax is a property tax, not a use tax, and follows the property from owner to owner. Therefore, unlike registration fees, taxes accumulate even when a vehicle is not used on the highway.

Property taxes are measured in millages. One mill is equal to one-tenth of a cent (1/10 of 1 cent) or 1/1000 of a dollar.

Huntsville Millage Rates
State Tax = 6.5 Mills
County Tax = 11.0 Mills
City Tax = 13.0 Mills
School Tax = 27.5 Mills
TOTAL TAX = 58.0 Mills

This means $5.80 assessed for each $100 assessed value

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References

Property Tax - Vehicles
Alabama Department of Revenue - Property Tax

STATE AD VALOREM TAXATION IN ALABAMA
http://education.ua.edu/wp-content/u...alorem-Tax.pdf

MADISON COUNTY PROPERTY TAX FACTS
Madison County Property Tax Facts

[walkies]

If you itemize federal tax you can count ad-valorem tax you pay each year as a deduction under personal property taxes. Not much but it might help lower your federal tax a little...

[writerwife]

And, like Reactionary said, it goes down each yr. When you purchased your car you pay your taxes so your first tag cost is usually negligible. The next year it's high and then it goes down from there.

[Tourian]

Originally Posted by writerwife

And, like Reactionary said, it goes down each yr. When you purchased your car you pay your taxes so your first tag cost is usually negligible. The next year it's high and then it goes down from there.

That's not quite it. You don't pay ad valorem tax at the dealer. The reason it is usually cheap that first year is that most times people trade a car in, so you get to transfer that tag. The cost to do that is only a few bucks. You get to cruise by with the ad valorem tax you already paid on your old car, then they whack you the next full year based on the value of your new(er) car.

If you buy a car without trading in another one but you do it close to the month you would renew, you only pay the amount for those few months, and that is why it is less. Then you get whacked the next time for the full year.

[jasonhsv]

Depending on the month you buy a car, and the month of your renewal, the 1st renewal can be very large.

My renewal month is October. A few years ago I bought a new car in December, with no trade in. The initial tag was around $25. No taxes were charged.

I get the renewal in October, and the amount was huge. I went to the tag office to find out why it was so much.

I was paying 22 months of tax - the previous 10 months, and the upcoming 12 months. Normally you're paying just the upcoming 12 months of tax.

[writerwife]

Originally Posted by Tourian

That's not quite it. You don't pay ad valorem tax at the dealer. The reason it is usually cheap that first year is that most times people trade a car in, so you get to transfer that tag. The cost to do that is only a few bucks. You get to cruise by with the ad valorem tax you already paid on your old car, then they whack you the next full year based on the value of your new(er) car.

If you buy a car without trading in another one but you do it close to the month you would renew, you only pay the amount for those few months, and that is why it is less. Then you get whacked the next time for the full year.

Yeah. That.

Mea Culpa

[Tennhioland]

Thanks for the info. Came from Maryland, don't think we had a property tax on our vehicles. But I'm sure they got me with a higher tax rate at purchase and with inspection and registration costs every couple of years. I just need to hurry up and buy a house here so I can enjoy that property tax break from what we had in Maryland.

[Reactionary]

Alabama doesn't tax rain (unlike Maryland).