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You can deduct only the Ad Valorem Tax portion of the annual auto registration on your Federal Schedule A. The new Title Ad Valorem Tax (TAVT) does not appear to be deductible for Federal or Georgia purposes. In order to be deductible as a personal property tax, it must be imposed on an annual basis.
An ad valorem tax is any tax assessed based on the value of an underlying property or transaction. Real estate taxes and sales taxes are common examples.
The main types of ad valorem taxes include property taxes and sales tax. An ad valorem tax is a tax that is calculated based on an assessed value and a tax rate.
The Latin phrase ad valorem means "ing to value." So all ad valorem taxes are based on the assessed value of the item being taxed. Property ad valorem taxes (property taxes) are usually levied by local jurisdictions, such as counties or school districts.
How is ad valorem tax calculated? It is calculated by multiplying the property's assessed value with the tax rates applied. For example, if A buys a car worth $1000 and the rate applied is 4%, the tax applicable is 1000*4/100 = 1000*0.04 = $40.