What is an "ad valorem" tax in Texas?

An "ad valorem" tax in Texas refers specifically to a tax that is based on the assessed value of property. This means that the amount of tax owed is determined by the value of the property as evaluated by tax assessors. The concept underlying ad valorem taxes is that they reflect the economic value of the property; thus, homeowners or property owners pay taxes proportional to the value of their respective properties. This type of tax is commonly used for real estate, personal property, and other assets, making it an essential source of revenue for local governments in Texas, as it supports services such as education, infrastructure, and public safety.

The other options describe different types of taxes that do not align with the foundational principles of an ad valorem tax. Income tax pertains to earnings rather than property value, a flat fee for property ownership does not account for value fluctuations, and a sales tax is charged on goods sold rather than on the ownership or value of property.