Motor Vehicle Tax
The centralized system for property tax assessments on motor vehicles is a piggyback programs supported by the Automated Vehicle Information System (AVIS). AVIS contains ownership records and various facts on motor vehicles and is maintained by the Transportation Cabinet.
Information is entered and maintained through online computer terminals located in each County Clerk’s office and in each PVA office. Vehicles registered with the County Clerk are also listed in the PVA. Boats are now included in the AVIS system and are registered in the same manner as other motor vehicles. This registration process leads to a property assessment based on values determined by the clean trade-in value of the property.
It is the responsibility of the PVA office to value vehicles missed by the online computer and to correct the values of those that were incorrectly valued and enter such values into the system vial the terminals in the PVA office. Determining taxable status is also a PVA responsibility according to KRS 132.487 (5) and KRS 133.110. The PVA is required to manually correct various records if transfer of ownership, address change, or titling requirements have not been done. The PVA is under the supervision of the Revenue Cabinet and, along with all deputies, must comply with policies, laws, and procedures required by the Revenue Cabinet.
The assessment date for vehicles is January 1st. The taxable situs of a motor vehicle is presumed to be the county of registration as of the assessment date (KRS 132.227). The PVA office uses the following guides to determine a value for a vehicle using the clean trade-in value:
• Late model used cars one to seven years old, NADA Value Guides, Official Used Car Guide.
• Automobiles and light trucks 8-18 years old, NADA Appraisal Guides, Official Older Car Guide.
• Heavy and medium duty trucks, National Market Reports, The Truck Blue Book.
• Motorcycles, NADA Appraisal Guides, Motorcycles/Snowmobile/ATV/ Personal Watercraft Guide
• Recreation vehicles and camping trailers, NADA Recreational Vehicle Appraisal Guide.
• Commercial trailers, Department of Property Taxation, Appraisal Guide Heavy Duty Trailers.
• Boats, boat trailers, and motors, NADA Marine Appraisal Guide, ABIS Marine Blue Book.
The assessment of all motorboats as defined in KRS 235.010 shall be administered in the same manner and according to the same procedures provided for motor vehicles in KRS 132.487.
The PVA may adjust values based upon the condition of the vehicle on the assessment date of the tax year. The PVA may adjust the NADA value if the vehicle is not considered to be in average condition in comparison to other vehicles of the same age and make. Adjustment for condition may be one or a combination of the following:
• Vehicle had high mileage on January 1.
• Vehicle had been wrecked and damage has not been repaired prior to assessment date, January 1.
• Vehicle value includes options which customer’s vehicle does not contain.
• Vehicle has a salvage title on January 1 of tax year.
Documentation Required for Reduction of Assessment
To adjust for mechanical damage, the PVA must receive an estimate for cost of repairs needed to put the vehicle in average condition. This estimate must be dated prior to January 1 of the assessment year.
To adjust for high mileage, evidence of high mileage on January 1 of the tax year must be provided. A form of documentation would be the receipt from having the oil changed in January.
Diesel Engines are identified within the VIN.
Vehicles which have a salvage title on January 1 of the tax year shall be assessed no more than 25% January NADA retail value (ref. KRS 186A.335). Owner must present the salvage title to the PVA for viewing.
Errors in assessment due to incorrect Vehicle Identification Number (VIN) shall not require any documentation.
Exonerations on Motax
The taxpayer sold the vehicle out-of-state prior to January 1 of the tax year. The best form of documentation is a copy of the bill of sale.
Kentucky residents in the military are required to pay Kentucky property tax. Non-resident military personnel shall provide a copy of their wage and earning statement or Affidavit of Residency which is filed with the Armed Services (Soldiers’ and Sailors’ Civil Relief Act).
• Non-resident affidavit from Armed Forces or wage earning statement as documentation.
• A civilian spouse of military personnel is not exempt under the Soldiers’ and Sailors’ Civil Relief Act.
If an owner has moved to another state prior to the assessment date, the owner’s motor vehicle shall not be taxed in Kentucky, provided that the owner has moved his motor vehicle to the new state. Documentation needed:
• A copy of income tax returns of the new state of residence for the tax year in question.
• Proof of out-of-state registration or property tax payment to other state on vehicles in question.
• A copy of out-of-state title issued prior to assessment date of the tax year for vehicle in question.
When a divorce occurs, property is awarded to one party or the other. In compliance with laws regarding ownership, the Cabinet will honor a divorce decree if signed by a judge prior to the assessment date of the tax year in question.
A debtor in bankruptcy must list all creditors on his/her petition for bankruptcy with the bankruptcy court to give the creditor time to file a proof of claim. Failure to list a creditor prohibits the debt to such creditor from being discharged through bankruptcy proceedings.
Public Service Companies pay taxes on their vehicles in the same manner as other taxpayers; that is, locally. These vehicles are also sitused locally. The situs, therefore, would be at the domicile of the branch or driver.
Per KRS 136.132, public service companies report motor vehicles and trailers that are owned, operated, or leased to the Revenue Cabinet each year on the Public Service Company Schedule for Owned and/or Leased Motor Vehicle Listing.