KRS § 138.470 — KY Code / Title XI / Chapter 138 / Section 138.470
138.470 Exemptions from tax
Status: in_force

138.470 Exemptions from tax. (Effective July 1, 2021)

There is expressly exempted from the tax imposed by KRS 138.460:

(1) (a) Motor vehicles titled or registered to the United States, or to the

Commonwealth of Kentucky or any of its political subdivisions; and

(b) The gross rental or lease charges for the rental or lease of a motor

vehicle paid by the United States, or the Commonwealth of Kentucky or

any of its political subdivisions;

(2) Motor vehicles titled or registered to institutions of purely public charity and

institutions of education not used or employed for gain by any person or

corporation;

(3) Motor vehicles which have been previously titled in Kentucky on or after July 1,

2005, or previously registered and titled in any state or by the federal

government when being sold or transferred to licensed motor vehicle dealers

for resale. The motor vehicles shall not be leased, rented, or loaned to any

person and shall be held for resale only;

(4) Motor vehicles sold by or transferred from dealers registered and licensed in

compliance with the provisions of KRS 186.070 and KRS 190.010 to 190.080

to members of the Armed Forces on duty in this Commonwealth under orders

from the United States government;

(5) Commercial motor vehicles, excluding passenger vehicles having a seating

capacity for nine (9) persons or less, owned by nonresident owners and used

primarily in interstate commerce and based in a state other than Kentucky

which are required to be registered in Kentucky by reason of operational

requirements or fleet proration agreements and are registered pursuant to KRS

186.145;

(6) Motor vehicles titled in Kentucky on or after July 1, 2005, or previously

registered in Kentucky, transferred between husband and wife, parent and

child, stepparent and stepchild, or grandparent and grandchild;

(7) Motor vehicles transferred when a business changes its name and no other

transaction has taken place or an individual changes his or her name;

(8) Motor vehicles transferred to a corporation from a proprietorship or limited

liability company, to a limited liability company from a corporation or

proprietorship, or from a corporation or limited liability company to a

proprietorship, within six (6) months from the time that the business is

incorporated, organized, or dissolved, if the transferor and the transferee are

the same business entity except for a change in legal form;

(9) Motor vehicles transferred by will, court order, or under the statutes covering

descent and distribution of property, if the vehicles were titled in Kentucky on or

after July 1, 2005, or previously registered in Kentucky;

(10) Motor vehicles transferred between a subsidiary corporation and its parent

corporation if there is no consideration, or nominal consideration, or in sole

consideration of the cancellation or surrender of stock;

(11) Motor vehicles transferred between a limited liability company and any of its

members, if there is no consideration, or nominal consideration, or in sole

consideration of the cancellation or surrender of stock;

(12) The interest of a partner in a motor vehicle when other interests are transferred

to him;

(13) Motor vehicles repossessed by a secured party who has a security interest in

effect at the time of repossession and a repossession affidavit as required by

KRS 186.045(6). The repossessor shall hold the vehicle for resale only and not

for personal use, unless he has previously paid the motor vehicle usage tax on

the vehicle;

(14) Motor vehicles transferred to an insurance company to settle a claim. These

vehicles shall be junked or held for resale only;

(15) Motor carriers operating under a charter bus certificate issued by the

Transportation Cabinet under KRS Chapter 281;

(16) (a) 1. Motor vehicles registered under KRS 186.050 that have a declared

gross vehicle weight with any towed unit of forty-four thousand and

one (44,001) pounds or greater; and

2. Farm trucks registered under KRS 186.050(4) that have a declared

gross vehicle weight with any towed unit of forty-four thousand and

one (44,001) pounds or greater.

(b) To be eligible for the exemption established in paragraph (a) of this

subsection, motor vehicles shall be registered at the appropriate range for

the declared gross weight of the vehicle established in KRS 186.050(3)(b)

and shall be prohibited from registering at a higher weight range. If a

motor vehicle is initially registered in one (1) declared gross weight range

and subsequently is registered at a declared gross weight range lower

than forty-four thousand and one (44,001) pounds, the person registering

the vehicle shall be required to pay the county clerk the usage tax due on

the vehicle unless the person can provide written proof to the clerk that

the tax has been previously paid;

(17) Motor vehicles transferred to a trustee to be held in trust, or from a trustee to a

beneficiary of the trust, if a direct transfer from the grantor of the trust to all

individual beneficiaries of the trust would have qualified for an exemption from

the tax pursuant to subsection (6) or (9) of this section;

(18) Motor vehicles transferred to a trustee to be held in trust, if the grantor of the

trust is a natural person and is treated as the owner of any portion of the trust

for federal income tax purposes under the provisions of 26 U.S.C. secs. 671 to

679;

(19) Motor vehicles transferred from a trustee of a trust to another person if:

(a) The grantor of the trust is a natural person and is treated as the owner of

any portion of the trust for federal income tax purposes under the

provisions of 26 U.S.C. secs. 671 to 679; and

(b) A direct transfer from the grantor of the trust to the person would have

qualified for an exemption from the tax pursuant to subsection (6) or (9) of

this section; and

(20) Motor vehicles under a manufacturer's statement of origin in possession of a

licensed new motor vehicle dealer that are titled and transferred to a licensed

used motor vehicle dealer and held for sale.