{"data":{"id":"us-ky/krs-138.460","jurisdiction":"us-ky","citation":"KRS 138.460","heading":"Motor vehicle usage tax -- Imposition -- Rate -- Collection -- Refunds.","body":"(1) A tax levied upon its retail price at the rate of six percent (6%) shall be paid on the\nuse in this state of every motor vehicle, except those exempted by KRS 138.470, at\nthe time and in the manner provided in this section.\n(2) The tax shall be collected by the county clerk or other officer with whom the\nvehicle is required to be titled or registered:\n(a) When the fee for titling or registering a motor vehicle the first time it is\noffered for titling or registration in this state is collected; or\n(b) Upon the transfer of title or registration of any motor vehicle previously titled\nor registered in this state.\n(3) The tax imposed by subsection (1) of this section and collected under subsection (2)\nof this section shall not be collected if the owner provides to the county clerk a\nsigned affidavit of nonhighway use, on a form provided by the department, attesting\nthat the vehicle will not be used on the highways of the Commonwealth. If  this type\nof affidavit is provided, the clerk shall, in accordance with the provisions of KRS\nChapter 139, immediately collect the applicable sales and use tax due on the\nvehicle.\n(4) (a) The tax collected by the county clerk under this section shall be r eported and\nremitted to the department on forms prescribed and provided by the\ndepartment. The department shall provide each county clerk affidavit forms\nwhich the clerk shall provide to the public free of charge to carry out the\nprovisions of KRS 138.450 and subsection (3) of this section. The county\nclerk shall for his services in collecting the tax be entitled to retain an amount\nequal to three percent (3%) of the tax collected and accounted for.\n(b) The sales and use tax collected by the county clerk un der subsection (3) of\nthis section shall be reported and remitted to the department on forms which\nthe department shall prescribe and provide at no cost. The county clerk shall,\nfor his or her services in collecting the tax, be entitled to retain an amount\nequal to three percent (3%) of the tax collected and accounted for.\n(c) Motor vehicle dealers licensed pursuant to KRS Chapter 190 shall not owe or\nbe responsible for the collection of sales and use tax due under subsection (3)\nof this section.\n(5) A county clerk or other officer shall not title, register or issue any license tags to the\nowner of any motor vehicle subject to the tax imposed by subsection (1) of this\nsection or the tax imposed by KRS Chapter 139, when the vehicle is being offered\nfor titling or registration for the first time, or transfer the title of any motor vehicle\npreviously registered in this state, unless the owner or his agent pays the tax levied\nunder subsection (1) of this section or the tax imposed by KRS Chapter 139, if\napplicable, in addition to any title, registration, or license fees.\n(6) (a) When a person offers a motor vehicle:\n1. For titling on or after July 1, 2005; or\n2. For registration;\nfor the first time in this state which was registered in another state that le vied\na tax substantially identical to the tax levied under this section, the person\nshall be entitled to receive a credit against the tax imposed by this section\nequal to the amount of tax paid to the other state. A credit shall not be given\nunder this subsection for taxes paid in another state if that state does not grant\nsimilar credit for substantially identical taxes paid in this state.\n(b) When a resident of this state offers a motor vehicle for registration for the first\ntime in this state:\n1. Upon wh ich the Kentucky sales and use tax was paid by the resident\noffering the motor vehicle for registration at the time of titling under\nsubsection (3) of this section; and\n2. For which the resident provides proof that the tax was paid;\na nonrefundable credit  shall be given against the tax imposed by subsection\n(1) of this section for the sales and use tax paid.\n(7) (a) A county clerk or other officer shall not title, register, or issue any license tags\nto the owner of any motor vehicle subject to this tax, wh en the vehicle is then\nbeing offered for titling or registration for the first time, unless the seller or\nhis agent delivers to the county clerk a notarized affidavit, if required, and\navailable under KRS 138.450 attesting to the total and actual considera tion\npaid or to be paid for the motor vehicle.\n(b) If a notarized affidavit is not available, the clerk shall follow the procedures\nunder KRS 138.450(12) for new vehicles, and KRS 138.450(14) or (15) for\nused vehicles.\n(c) The clerk shall attach the notari zed affidavit, if available, or other\ndocumentation attesting to the retail price of the vehicle as the department\nmay prescribe by administrative regulation promulgated under KRS Chapter\n13A to the copy of the certificate of registration and application f or title\nmailed to the department.\n(8) Notwithstanding the provisions of KRS 138.450, the tax shall not be less than six\ndollars ($6) upon titling or first registration of a motor vehicle in this state, except\nwhere the vehicle is exempt from tax under KRS 138.470 or 154.45-090.\n(9) Where a motor vehicle is sold by a dealer and the purchaser returns the vehicle for\nany reason to the same dealer within sixty (60) days for a vehicle replacement or a\nrefund of the purchase price, the purchaser shall be entitle d to a refund of the\namount of usage tax received by the department as a result of the registration of the\nreturned vehicle. In the case of a new motor vehicle, the registration of the returned\nvehicle shall be canceled and the vehicle shall be considered to have not been\npreviously registered in Kentucky when resold by the dealer.\n(10) When a manufacturer refunds the retail purchase price or replaces a new motor\nvehicle for the original purchaser within ninety (90) days because of malfunction or\ndefect, the purchaser shall be entitled to a refund of the amount of motor vehicle\nusage tax received by the department as a result of the first titling or registration. A\nperson shall not be entitled to a refund unless the person has filed with the\ndepartment a report from the manufacturer identifying the vehicle that was replaced\nand stating the date of replacement.\n(11) Notwithstanding the time limitations of subsections (9) and (10) of this section,\nwhen a dealer or manufacturer refunds the retail purchase price or replaces a motor\nvehicle for the purchaser as a result of formal arbitration or litigation, or, in the case\nof a manufacturer, because ordered to do so by a dispute resolution system\nestablished under KRS 367.865 or 16 C.F.R. 703, the purchaser shall be  entitled to\na refund of the amount of motor vehicle usage tax received by the department as a\nresult of the titling or registration. A person shall not be entitled to a refund unless\nthe person files with the department a report from the dealer or manufac turer\nidentifying the vehicle that was replaced.\n(12) (a) An owner who has paid the tax levied under this section on a used motor\nvehicle or U -Drive-It vehicle based upon the retail price as defined in KRS\n138.450(16)(a) shall be entitled to a refund of an y tax overpayment, plus\napplicable interest as provided in KRS 131.183, if the owner:\n1. Files for a refund with the department within four (4) years from the\ndate the tax was paid as provided in KRS 134.580; and\n2. Documents to the satisfaction of the department that the condition of the\nvehicle merits a retail price lower than the retail price as defined in KRS\n138.450(16)(a).\n(b) The department shall promulgate administrative regulations to develop the\nforms and the procedures by which the owner can appl y for a refund and\ndocument the condition of the vehicle. The department shall provide the\ninformation to each county clerk.\n(c) The refund shall be based upon the difference between the tax paid and the tax\ndetermined to be due by the department at the ti me the owner titled or\nregistered the vehicle.","path":["KRS Chapter 138"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=44482","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:30Z","sha256":"504134f25d7d8ed449b3e2f4665743f8a4e4f22d661d1e57805c2ecd4a2a8522","source_id":"us-ky","stale":false,"prev":"us-ky/krs-138.455","next":"us-ky/krs-138.4602"},"notice":"GroundRules: Original legal text. Not legal advice."}