KRS § 138.460 — KY Code / Title XI / Chapter 138 / Section 138.460
138.460 Motor vehicle usage tax -- Imposition -- Rate -- Collection -- Refunds
Status: in_force

138.460 Motor vehicle usage tax -- Imposition -- Rate -- Collection -- Refunds.

(1) A tax levied upon its retail price at the rate of six percent (6%) shall be paid on the

use in this state of every motor vehicle, except those exempted by KRS 138.470, at

the time and in the manner provided in this section.

(2) The tax shall be collected by the county clerk or other officer with whom the

vehicle is required to be titled or registered:

(a) When the fee for titling or registering a motor vehicle the first time it is

offered for titling or registration in this state is collected; or

(b) Upon the transfer of title or registration of any motor vehicle previously titled

or registered in this state.

(3) The tax imposed by subsection (1) of this section and collected under subsection (2)

of this section shall not be collected if the owner provides to the county clerk a

signed affidavit of nonhighway use, on a form provided by the department, attesting

that the vehicle will not be used on the highways of the Commonwealth. If this type

of affidavit is provided, the clerk shall, in accordance with the provisions of KRS

Chapter 139, immediately collect the applicable sales and use tax due on the

vehicle.

(4) (a) The tax collected by the county clerk under this section shall be reported and

remitted to the department on forms prescribed and provided by the

department. The department shall provide each county clerk affidavit forms

which the clerk shall provide to the public free of charge to carry out the

provisions of KRS 138.450 and subsection (3) of this section. The county

clerk shall for his services in collecting the tax be entitled to retain an amount

equal to three percent (3%) of the tax collected and accounted for.

(b) The sales and use tax collected by the county clerk under subsection (3) of

this section shall be reported and remitted to the department on forms which

the department shall prescribe and provide at no cost. The county clerk shall,

for his or her services in collecting the tax, be entitled to retain an amount

equal to three percent (3%) of the tax collected and accounted for.

(c) Motor vehicle dealers licensed pursuant to KRS Chapter 190 shall not owe or

be responsible for the collection of sales and use tax due under subsection (3)

of this section.

(5) A county clerk or other officer shall not title, register or issue any license tags to the

owner of any motor vehicle subject to the tax imposed by subsection (1) of this

section or the tax imposed by KRS Chapter 139, when the vehicle is being offered

for titling or registration for the first time, or transfer the title of any motor vehicle

previously registered in this state, unless the owner or his agent pays the tax levied

under subsection (1) of this section or the tax imposed by KRS Chapter 139, if

applicable, in addition to any title, registration, or license fees.

(6) (a) When a person offers a motor vehicle:

1. For titling on or after July 1, 2005; or

2. For registration;

for the first time in this state which was registered in another state that levied

a tax substantially identical to the tax levied under this section, the person

shall be entitled to receive a credit against the tax imposed by this section

equal to the amount of tax paid to the other state. A credit shall not be given

under this subsection for taxes paid in another state if that state does not grant

similar credit for substantially identical taxes paid in this state.

(b) When a resident of this state offers a motor vehicle for registration for the first

time in this state:

1. Upon which the Kentucky sales and use tax was paid by the resident

offering the motor vehicle for registration at the time of titling under

subsection (3) of this section; and

2. For which the resident provides proof that the tax was paid;

a nonrefundable credit shall be given against the tax imposed by subsection

(1) of this section for the sales and use tax paid.

(7) (a) A county clerk or other officer shall not title, register, or issue any license tags

to the owner of any motor vehicle subject to this tax, when the vehicle is then

being offered for titling or registration for the first time, unless the seller or

his agent delivers to the county clerk a notarized affidavit, if required, and

available under KRS 138.450 attesting to the total and actual consideration

paid or to be paid for the motor vehicle.

(b) If a notarized affidavit is not available, the clerk shall follow the procedures

under KRS 138.450(12) for new vehicles, and KRS 138.450(14) or (15) for

used vehicles.

(c) The clerk shall attach the notarized affidavit, if available, or other

documentation attesting to the retail price of the vehicle as the department

may prescribe by administrative regulation promulgated under KRS Chapter

13A to the copy of the certificate of registration and application for title

mailed to the department.

(8) Notwithstanding the provisions of KRS 138.450, the tax shall not be less than six

dollars ($6) upon titling or first registration of a motor vehicle in this state, except

where the vehicle is exempt from tax under KRS 138.470 or 154.45-090.

(9) Where a motor vehicle is sold by a dealer and the purchaser returns the vehicle for

any reason to the same dealer within sixty (60) days for a vehicle replacement or a

refund of the purchase price, the purchaser shall be entitled to a refund of the

amount of usage tax received by the department as a result of the registration of the

returned vehicle. In the case of a new motor vehicle, the registration of the returned

vehicle shall be canceled and the vehicle shall be considered to have not been

previously registered in Kentucky when resold by the dealer.

(10) When a manufacturer refunds the retail purchase price or replaces a new motor

vehicle for the original purchaser within ninety (90) days because of malfunction or

defect, the purchaser shall be entitled to a refund of the amount of motor vehicle

usage tax received by the department as a result of the first titling or registration. A

person shall not be entitled to a refund unless the person has filed with the

department a report from the manufacturer identifying the vehicle that was replaced

and stating the date of replacement.

(11) Notwithstanding the time limitations of subsections (9) and (10) of this section,

when a dealer or manufacturer refunds the retail purchase price or replaces a motor

vehicle for the purchaser as a result of formal arbitration or litigation, or, in the case

of a manufacturer, because ordered to do so by a dispute resolution system

established under KRS 367.865 or 16 C.F.R. 703, the purchaser shall be entitled to

a refund of the amount of motor vehicle usage tax received by the department as a

result of the titling or registration. A person shall not be entitled to a refund unless

the person files with the department a report from the dealer or manufacturer

identifying the vehicle that was replaced.

(12) (a) An owner who has paid the tax levied under this section on a used motor

vehicle or U-Drive-It vehicle based upon the retail price as defined in KRS

138.450(16)(a) shall be entitled to a refund of any tax overpayment, plus

applicable interest as provided in KRS 131.183, if the owner:

1. Files for a refund with the department within four (4) years from the

date the tax was paid as provided in KRS 134.580; and

2. Documents to the satisfaction of the department that the condition of the

vehicle merits a retail price lower than the retail price as defined in KRS

138.450(16)(a).

(b) The department shall promulgate administrative regulations to develop the

forms and the procedures by which the owner can apply for a refund and

document the condition of the vehicle. The department shall provide the

information to each county clerk.

(c) The refund shall be based upon the difference between the tax paid and the tax

determined to be due by the department at the time the owner titled or

registered the vehicle.