Personal Property Tax Glossary

Personal Property Tax Glossary - for the State of Alabama

Assessment
A decision made by the tax assessor as to the market value of a property.

Assessment level
A ratio determined by the tax authority as of what percentage of market value is to be taxed. In the State of Alabama the assessment level is 20% for personal property. To illustrate: A property with a fair market value of $5,000 is to be taxed. The district tax rate is 7%. The tax is calculated thus: $5,000 X .2 X .07 = $14.

Fair Market Value
The price (cash or equivalent) that a buyer could reasonably be expected to pay and a seller could reasonably be expected to accept, if the business were for sale on the open market for a reasonable period of time, both buyer and seller being in possession of all pertinent facts, and neither being under any compulsion to act.

Salvage Value
The value which remains when a property can no longer serve its intended purpose. This value may be only that of scrap metal or it may be the aggregate of its assembled parts which may be repaired and placed back into service. The State of Alabama places an estimate of a minimum of 5% of cost on salvaged items. To illustrate: A lathe was purchased for $10,000 in 1970. The lathe is worn out and can no longer cut metal accurately. It is disconnected and carried to a storage area. The minimum estimated value of this lathe is 5% X $10,000 = $50. If the lathe may be overhauled and placed back into service its value may be much more. The taxpayer should discuss such situations with the tax assessor.

Tax Assessor
An elected county official in the State of Alabama charged by the Alabama Constitution with (among other duties) assessing property in the county for advalorem taxation. The Tax Assessor may have Deputies which are his/her agents as defined by the Alabama Constitution.