Black's Law Dictionary,
Sixth Edition, p. 61:
ad valorem tax.
According to value. A tax imposed on the value of property.
The more common ad valorem tax is that imposed by states, counties,
and cities on real estate. Ad valorem taxes, can, however, be
imposed on personal property; e.g., a motor vehicle tax may be imposed
upon the value of an automobile and is therefore deductible as a tax.
A tax levied on property or an article of commerce in proportion to
its value, as determined by assessment or appraisal. Callaway
v. City of Overland Park, 211 Kan. 646, 508 P.2d. 902, 907
Duties are either ad valorem or specific ; the former
when the duty is laid in the form of a percentage on the value of the
property; the latter where it is imposed on a fixed sum on each article
of a class without regard to its value.
[Black's Law Dictionary, Sixth Edition, p, 61]
Wheeling Steel Corporation
v. Fox, 298 U.S. 193 (1936):
"We have held that it is essential to the validity of such a tax, under
the due process clause, that the property shall be within the territorial
jurisdiction of the taxing state. This rule receives its most familiar
illustration in the case of land. The rule has been ex-
[298 U.S. 193, 209] tended to tangible personal
property which is thus subject to taxation exclusively in the state
where it is permanently located, regardless of the domicile of the owner.
Union Refrigerator Transit Co. v. Kentucky,
199 U.S. 194, 204 , 206 S., 26 S.Ct. 36, 4 Ann.Cas. 493; Frick v.
Pennsylvania,
268 U.S. 473, 489 , 45 S.Ct. 603, 42 A.L.R. 316. We have said that
the application to the states of the rule of due process arises from
the fact 'that their spheres of activity are enforced and protected
by the Constitution, and therefore it is impossible for one state to
reach out and tax property in another without violating the Constitution.'
United States v. Bennett,
232 U.S. 299, 306 , 34 S.Ct. 433, 437. Compare Burnet v. Brooks,
288 U.S. 378, 401 , 53 S.Ct. 457, 86 A.L.R. 747. When we deal with
intangible property, such as credits and choses in action generally,
we encounter the difficulty that by reason of the absence of physical
characteristics they have no situs in the physical sense, but have the
situs attributable to them in legal conception. Accordingly we have
held that a state may properly apply the rule mobilia sequuntur personam
and treat them as localized at the owner's domicile for purposes of
taxation. Farmers' Loan & Trust Co. v. Minnesota,
280 U.S. 204, 211 , 50 S.Ct. 98, 65 A. L.R. 1000. And having thus
determined 'that in general intangibles may be properly taxed at the
domicile of their owner,' we have found 'no sufficient reason for saying
that they are not entitled to enjoy an immunity against taxation at
more than one place similar to that accorded to tangibles.' Id.,
280
U.S. 204 , at page 212, 50 S.Ct. 98, 100, 65 A.L.R. 1000. The principle
thus announced in Farmers' Loan & Trust Co. v. Minnesota has had progressive
application. Baldwin v. Missouri,
281
U.S. 586 , 50 S.Ct. 436, 72 A.L.R. 1303; Beidler v. South Carolina
Tax Commission,
282 U.S.
1 , 51 S.Ct. 54; First National Bank v. Maine,
284 U.S. 312, 328 , 329 S., 52 S.Ct. 174, 177, 77 A.L.R. 1401. But
despite the wide application of the principle, an important exception
has been recognized."
"In the case of tangible property, the ancient maxim, which had its
origin when personal property consisted in [298 U.S. 193,
210] the main of articles appertaining to the person of the
owner, yielded in modern times to the 'law of the place where the property
is kept and used.' First National Bank v. Maine, supra. It was in view
'of the enormous increase of such property since the introduction of
railways and the growth of manufactures' that it came to be regarded
as 'having a situs of its own for the purpose of taxation, and correlatively
to exempt at the domicil of its owner.' Union Refrigerator Transit Co.
v. Kentucky, supra,
199 U.S. 194 , at page 207, 26 S.Ct. 36, 39, 4 Ann.Cas. 493. There
has been an analogous development in connection with intangible property
by reason of the creation of choses in action in the conduct by an owner
of his business in a state different from that of his domicile. New
Orleans v. Stempel,
175 U.S. 309 , 20 S.Ct. 110; Bristol v. Washington County,
177 U.S. 133 , 20 S.Ct. 585; State Board of Assessors v. Comptor
National,
191 U.S. 388 , 24 S.Ct. 109; Metropolitan Life Insurance Co. v.
New Orleans,
205 U.S. 395 , 27 S.Ct. 499; Liverpool & L. & G. Insurance Co. v.
Board of Assessors for Parish of Orleans,
221 U.S. 346 , 31 S.Ct. 550, L.R.A. 1915C, 903."
"These cases, we said in Farmers' Loan & Trust Co. v. Minnesota, supra,
280 U.S. 204 , at page 213, 50 S.Ct. 98, 101, 65 A.L.R. 1000, 'recognize
the principle that choses in action may acquire a situs for taxation
other than at the domicile of their owner, if they have become integral
parts of some local business.' We adverted to this reservation in Beidler
v. South Carolina Tax Commission, supra,
282 U.S. 1 , at page 8, 51 S.Ct. 54, and in First National Bank
v. Maine, supra,
284 U.S. 312 , at page 331, 52 S.Ct. 174, 77 A.L.R. 1401"
[Wheeling Steel Corporation
v. Fox, 298 U.S. 193 (1936)]
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